Analyzing D&O and E&O Coverage for Data Breach and Privacy Litigation and Regulatory Investigations

Description

D&O insurance is front and center since data breaches spurred derivative lawsuits against company directors and officers of Target and Sony. Additional scrutiny by regulatory agencies such as the FCC, SEC and FTC on officers’ and directors’ role in cybersecurity has made the issue a major concern for companies and their directors and officers.

To date, there has been little or no case law regarding the applicability of D&O policies to class action lawsuits arising out of data breaches. Counsel determining whether coverage is available under a D&O or E&O policy must analyze the specific policy language, conditions, provisions and exclusions, and apply it to the type of claim alleged and facts of the claim.

While specific cyberliability exclusions are not prevalent in D&O or professional liability policies, other standard policy exclusions may apply. Given the active nature of federal and state agencies in regulating cybersecurity, for example, the scope of regulatory exclusions may become critical.

Listen as our panel of insurance attorneys discusses coverage under D&O and E&O policies for data breach and privacy violation claims and litigation for third-party liability and defense costs. The panel will also look at how these coverages can reach other exposures, such as regulatory investigations, fines and penalties, and the first-party costs associated with managing a data breach event. The panel will review defense and plaintiff approaches to resolving coverage disputes between insurer and insured that arise in the wake of data breaches and privacy violations.