There are changes occurring to the standard commercial general liability policy that all business owners should know of to make informed decisions when purchasing their insurance policy. The Insurance Services Office, Inc. (ISO) now requires, as of May 1, 2014, a new endorsement that excludes data breach liability. This endorsement , entitled “Exclusion-Access or Disclosure of Confidential or Personal Information and Data-related liability-with limited bodily injury exception,” means that the current standard commercial general liability policy will not cover damages to a company from breach of data that leads to confidential or personal information leaks.
In the past I’ve blogged numerous times regarding the needs of businesses and how they’ve evolved over time to become extremely vulnerable to the loss of data and vital business information of clients and customers with the increasing reliance on the Internet. With data breaches, there is potential liability to third parties and damages to the business if they cannot run from data loss. As the world changes and evolves, businesses now heavily rely on computers and servers for the security of valuable data of customer orders, customer lists, and confidential payment information. , I discussed cyber liability insurance policies and how these policies are largely variable in nature. Now, with the May 1, 2014 data breach exclusion, the purchase of a separate and apart cyber liability policy is crucial and should be examined by businesses that rely on electronic data for their daily needs.
When a commercial business suffers a data loss, a cyber liability policy is the only policy specifically designed to cover expenses related to managing and getting past a data breaches incur large costs of investigation, data fixes, remediation of computer systems, and notifying customers. A data breach can cost businesses huge expenses in computer forensics and remedial measures to manage public perception. Quantifying and navigating business data losses is a rising specialty as there are special nuances because no two data breaches or commercial businesses are exactly alike. Deciphering a cyber policy, and its exact policy coverage is also breaking new ground as these policies are relatively new in relation to a commercial general liability policy. Consulting the proper professional to purchase the right cyber policy is a must and, if a loss occurs, finding the right consultant on a data breach claim can be a huge difference in a company’s capability to recover from a data breach.