4th Circ. Weighs Cyber Coverage Under Traditional Insurance
March 23, 2016
“4th Circ. Weighs Cyber Coverage Under Traditional Insurance”
Farella Braun + Martel Insurance Recovery Partner Tyler Gerking offered his thoughts on cyber coverage and the case Travelers Indemnity Co. of America v. Portal Healthcare Solutions LLC. In the article, Mr. Gerking said the fact that a separate market for cyberinsurance exists is irrelevant because the district court found coverage was available to Portal under the language of the Travelers policy. "If a [general liability] insurer wants to push this type of risk into the cyberinsurance realm, it needs to be clearer," Gerking said.
The outcome of the case is important because many data security breaches occur after an employee of a company makes a mistake, as opposed to hacking by a third party, according to Gerking. "An employee error can often lead to as much or more trouble than a malicious act," he said.
Link to article at Law360. Subscription required.