Does Cyber Insurance Cover Privacy Lawsuits?

FTC guidance describes third-party cyber coverage as generally addressing liability claims, including litigation costs, settlements, and payments to affected consumers. A lawsuit still must meet the policy’s definitions and conditions. A complaint alleging privacy harm unrelated to a covered security or privacy event may fall outside the cyber form, and some claims may be addressed by other liability coverage.

Review the privacy and network-security insuring agreements, covered claimants, definition of wrongful act, defense provisions, consent-to-settle terms, and exclusions for known events or contractual liability. Confirm whether defense costs reduce the limit and whether regulatory proceedings have a separate sublimit. If customer or employee information is involved, compare the policy’s definition of protected information with the actual data your company collects.