May 29, 2015 Articles

P.F. Chang's Cyber Breach Raises CGL Coverage Concerns

The Travelers lawsuit makes clear that consumer general liability policies alone may not provide coverage for cyber incidents.

By Michael Luongo

Technological advancements in recent decades have enabled businesses to rapidly expand their operations, reduce costs, improve reliability, and enhance their customers’ experience. A corollary of this proliferation of technology is that businesses regularly collect and store detailed personal information about their customers, including home addresses, credit and debit card numbers, and bank account information. While businesses use this information to better serve their clientele, hackers and other bad actors see a treasure trove of valuable data that can be exploited for financial gain. Not surprisingly, hackers are increasingly targeting retailers, such as Target and Home Depot, in an attempt to steal customer information. Nicole Perlroth, “Target Struck in the Cat-and-Mouse Game of Credit Theft,” N.Y. Times, Dec. 19, 2013; Mitch Lipka, “56 Million Accounts at Risk in Home Depot Hack,” CBS Moneywatch, Sept. 18, 2014. Attacks are becoming so commonplace, that many experts warn that it is not a question of if a company’s security systems will be compromised, but when. Kate Vinton, “How Companies Can Rebuild Trust after a Security Breach,” Forbes, July 1, 2014.


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