It comes as no surprise to coverage attorneys that cyber liability has emerged as one of the hottest insurance topics. Each day brings new reports of actual or suspected data breaches. On September 2, 2014, Home Depot became the latest major national corporation to suspect a large-scale data breach, which consultants estimate could be even bigger than the Target data breach.[1] Indeed, from just the beginning of the year through September 2, 2014, 521 data breaches took place or were suspected to have taken place, with over 17.8 million records exposed.[2]
The insurance industry has responded to the threat of cyber liability by introducing policies specifically designed to provide coverage for certain cyber liability threats, encompassing third-party liability as well as first-party property coverages.[3] The earliest policies were written on nonstandard forms, and the Insurance Services Office (ISO) has recently introduced a cyber insurance program for businesses,[4] indicating that cyber policies have become a more mainstream line of coverage.