“…Network Security and Privacy Liability policies are generally designed to address first-party risks and third-party liability–sometimes in the same policies, sometimes separately…”
“…first-party losses. These might include business interruption, which could be caused by a flood or fire in a data center, or malicious hacking by a disgruntled employee or even a cyber-crook half a world away...”
There is also the risk of being sued by third parties for somehow allowing–or failing to prevent–unauthorized access to sensitive information.
When IT goes down, business screeches to a halt. Indeed, for businesses such as online retailers, brokerages and some financial firms, the IT and data assets are the entire business–every bit as critical as the factory and warehouse are to the hard-goods manufacturer, or the vehicle fleet to a trucking company.
As more and more companies–and their insurers–are realizing, this reliance on IT creates a hornet’s nest of risks that can result in crippling losses that conventional, turn-of-the-century P&C insurance coverages won’t respond to. These new issues call for a new category of coverage.
Perhaps even more ominous are the all-new liability exposures inherent in IT operations. A raft of relatively new regulations and legislation makes companies responsible for safeguarding personal and confidential data they collect as part of everyday e-commerce operations.
Companies are liable for customer credit card numbers, financial transactions, medical history, credit information and other sensitive data.
For more:Â http://www.propertycasualty360.com/2010/03/15/cyber-coverage-the-new-must-have-in-the-property#
