Does Cyber Insurance Cover Vendor Breaches?
A vendor breach may trigger your cyber coverage for response costs or interruption if the policy covers data held by vendors or dependent systems.
Your exposure depends on whose data was compromised and how the policy defines a security event. Check whether it pays for notification, forensics, legal support, and lost income when the incident occurs in a vendor’s system.
Review the protected-information definition, whether data in a vendor’s custody is included, and the event trigger for notification, forensics, and legal expenses. Check whether third-party claims require allegations against your business and whether the vendor must be a named dependent system for interruption. Compare notice deadlines in the policy and vendor agreement. Keep a record of the data shared and the vendor’s incident report.
