Don’t Overlook Commercial General Liability Insurance to Defend a Data Breach

Even though cyber insurance is becoming more readily available in many cases, companies whose data is hacked should not overlook the possible supplemental coverage provided by their existing commercial general liability insurance, which may cover the cost of defending the litigation that inevitably arises as a result. Some recent decisions appear to hold that CGL insurance does not obligate the carrier to provide such defense costs. However, in a recent case involving Travelers Indemnity Company, the Fourth Circuit upheld a lower court decision requiring the CGL carrier to provide a defense following a data breach. In a guest article, Richard A. Blunk, managing director and general counsel of Thermopylae Ventures, LLC, analyzes Travelers and a related line of cases to examine the possibility of whether other existing insurance coverage may provide data breach litigation defense costs as part of a coordinated corporate risk program. See also “Building a Strong Cyber Insurance Policy to Weather the Potential Storm” Part One (Nov. 25, 2015); Part Two (Dec. 9, 2015).

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