Despite the proliferation of headlines about data breaches and cyber incidents, some businesses may still feel they don’t need cyber coverage. Providing examples of actual cyber and data breach claims can highlight the risks faced.
Cyber Liability Coverage and Data Breach Coverage are designed to help businesses respond to a range of cyber incidents, including breaches of personally identifying or personally sensitive information, threats of unauthorized intrusion into or interference with computer systems, damage to data and systems from a computer attack, and cyber-related litigation. Here are six 2019 cyber claims:
CLAIM SCENARIO 1
A burglar broke into an accountant’s office and stole a computer with the tax records of clients. The insured’s clients were in four states and he needed assistance meeting the various state law notification requirements. Clients were urged to contact their banks and place alerts on their credit files.
Coverage Applicable: Data Breach Paid Loss after Deductible: $28,000
CLAIM SCENARIO 2
An employee of an investment company installed peer-to-peer file sharing software on a company computer. Identity thieves manipulated the software to access the records of clients on the computer system. After consultation with an attorney, the insured learned that he was obligated to notify the clients of the breach. Additionally, it was determined that the insured would need to hire an outside firm to help restore the computer system to its preattack functionality.
Coverage Applicable: Data Breach & Cyber Liability Paid Loss after Deductible: $50,000
CLAIM SCENARIO 3
While trying to balance the books, a business owner received a strange pop-up on his laptop. A ransomware virus locked the system until the extortion demand was paid. After consulting with the insurance carrier, the insured decided to pay the $600 to unlock the system.
Coverage Applicable: Cyber Liability Paid Loss after Deductible: $2,400
CLAIM SCENARIO 4
An unknown actor stole approximately 20 deal jackets containing the Personal Identifying Information of customers from a dealership. The insured provided breach notifications and credit monitoring services to affected individuals. Two customers subsequently made legal demands as a result of this breach.
Coverage Applicable: Data Breach Paid Loss after Deductible: $20,013
CLAIM SCENARIO 5
A business experienced a cyber-attack that involved compromise of its servers. After hacking into the system, criminals used the contacts from the business system to launch a ransomware attack against every email address in the insured system’s contacts. Several of the contacts filed lawsuits claiming that they failed to properly secure the insured’s system. Coverage was provided for the costs of hiring lawyers and to settle cases.
Coverage Applicable: Cyber Liability Paid Loss after Deductible: $14,000
CLAIM SCENARIO 6
A business posted a picture of a local celebrity on their website. The insured noticed increased business attributed to this change. However, a letter was received from the celebrity’s lawyer demanding that the picture be taken down. The lawyer also argued that their client’s reputation may have been harmed by the association to this insured’s product. The business owner hired an attorney to respond to the demand letter.
Coverage Applicable: Cyber Liability Paid Loss after Deductible: $7,000