Insurance Coverage for Data Breach and Privacy Violations: Current Status of Coverage Under D&O, E&O and Cyber Policies

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, August 23, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide insurance counsel with an analysis of current trends and developments regarding data breach and privacy violation claims and litigation. The program will analyze the current landscape regarding potential insurance coverage under D&O, E&O, and cyber policies. Are the newer cyber products living up to expectations as originally marketed to policyholders?

Description

Disputes concerning coverage for data breach and privacy violations have moved away from traditional general liability policies to other insurance products, including newer cyber insurance. One of the more recent trends seen is an increase in cases seeking coverage under D&O policies. In addition, the New York Department of Financial Services regulations now require boards of directors to certify compliance with a regulation that requires insurers and other financial services institutions to establish and maintain a cybersecurity program.

In the past few years, a body of case law has emerged indicating the scope of coverage, or limitations to coverage, under specific business policies and for different cybercrimes. In  Apache Corp. v. Great American Insurance Co., the Fifth Circuit held that an email phishing scam did not implicate computer fraud coverage. 

As courts begin to interpret cybersecurity policies, it is likely they will rely on long-standing principles of insurance and contract law applicable to other types of policies. The court’s ruling in P.F. Chang’s China Bistro v. Federal Deposit Insurance Co. is illustrative on that and underscores the importance of understanding the policy provisions and exclusions.

Listen as our panel of experts discusses trends in data breach and privacy violation claims and litigation. Our panel will outline how to examine existing business policies and evaluate cyber policies to determine the optimal coverage for each situation. 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, and provide an update on the case law that has begun to emerge.

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Outline

  1. Trends in data breach litigation, liabilities, and exposures
    1. Standing and requirement to show “damages” — plaintiffs’ lawyers still trying
    2. Increase in regulatory actions (FCC, SEC, FTC, etc.)
    3. Rise in shareholder and other securities actions
  2. Current status of coverage under D&O, E&O policies
    1. Apache Corp. v. Great American Insurance Co. (5th Cir.)
    2. Relevant coverage under D&O and E&O policies
    3. New York Department of Financial Services regulations
  3. Cyber insurance trends and developments
    1. First-party coverages
    2. Third-party liability
    3. Coverage battlegrounds (misrepresentation, sublimit disputes)
    4. P.F. Chang’s China Bistro, Inc. v. Federal Insurance Co. (D. Ariz. 2016)

Benefits

The panel will review these and other key questions:

  • Which policies may yield the most recovery for costs and expenses arising from the breach such as notification, credit monitoring and public relations?
  • When might D&O and E&O provisions and policies provide coverage to cyber risks?
  • Have cyber policies provided adequate protections to the companies that were early purchasers of these new products?

Faculty

Roberta D. Anderson
Roberta D. Anderson

Director
Cohen & Grigsby

A Partner of the firm’s Data Security and Insurance Recovery Practice Groups, Ms. Anderson concentrates her...  |  Read More

Laura Schmidt, Esq.
Laura Schmidt, Esq.

White and Williams

Ms. Schmidt's practice includes insurance coverage litigation, bad faith litigation, and insurance contract...  |  Read More

William T. Um
William T. Um

Policyholder, Counsel
Kilpatrick Townsend & Stockton

Mr. Um represents corporate policyholders in complex insurance coverage claims relating to class actions, media...  |  Read More

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