This type of coverage is designed to cover consumers of technology services or products. More specifically, the policies are intended to cover a variety of both liability and property losses that may result when a business engages in various electronic activities, such as selling on the Internet or collecting data within its internal electronic network.
Most notably, but not exclusively, cyber and privacy policies cover a business’ liability for a data breach in which the firm’s customers’ personal information, such as Social Security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the firm’s electronic network.
The policies cover a variety of expenses associated with data breaches, including:
- notification costs
- credit monitoring
- costs to defend claims by state regulators
- fines and penalties
- loss resulting from identity theft
In addition, the policies cover liability arising from website media content, as well as property exposures from:
- business interruption
- data loss/destruction
- computer fraud
- funds transfer loss
- cyber extortion