An Introduction to
The Emerging Risk of Privacy Liability
Common insurance coverages found in a cyber and privacy insurance policy.
Expense Coverages (referred to as First Party Costs)
NOTIFICATION COSTS ;ese are the costs associated
with letting all those a;ected by the breach know that it
has occurred. ;is would include costs such as: mailing
campaigns, credit monitoring, call centres to handle
questions, and other costs of that nature.
FORENSIC INVESTIGATIVE COSTS ;ese are costs
associated with hiring a professional third party to determine
where, when, and how the breach occurred; ;is is often one
of the costliest areas of a breach, because even if the data did
not go beyond the perimeters of the system, there is still the
cost of determining that, and experts charge by the hour.
BUSINESS INTERRUPTION Lost income as a result of
the breach during the period of restoration.
CRISIS MANAGEMENT EXPENSES ;e costs incurred
in hiring a professional team to help prevent reputational
harm to your business. ;is could include a PR team, lawyer
to draft a press release, etc.
DATA RESTORATION ;e cost to restore the network
and data to the point it was at before the event occurred.
;is can include both hardware and software replacement.
CYBER EXTORTION Costs associated with an attack
or threat against the company, when there is a demand for
compensation to stop the attack. ;is has been the most
common threat that small business face that the insurance
policy can help with.
REGULATORY PROCEEDINGS COVERAGE
Coverage to provide for costs associated with being called
in front of a civil, administrative, or regulatory proceeding.
;is portion of the policy will become more important
with the Digital Privacy Act coming into e;ect.
Third Party Cost Coverage (Liability Coverages)
NETWORK SECURITY LIABILITY Covers damages and
claims expenses associated with the unauthorized access to,
degradation of, or disruption to the insured’s network
through the use of malware, denial of service attacks,
phishing, etc. causing loss.
PRIVACY LIABILITY Covers the unauthorized collection,
disclosure, use, access, destruction, or modi;cation of
personal protected Information.
INTERNET MEDIA LIABILITY Liability resulting
from allegations of: infringement of privacy, defamation,
disparagement, piracy, copyright infringement, etc.
related to content displayed electronically eg., a
website, blog, chat forum, etc.
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