Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Commercial LinesMedium
A Florida-based e-commerce platform stores sensitive customer data, including credit card numbers and personal information. They experienced a data breach where hackers gained unauthorized access to their systems, compromising thousands of customer records. The company incurred significant costs for forensic investigation, legal defense, and notifying affected customers, and also faces potential lawsuits. Which aspect of Cyber Liability insurance would primarily cover these costs?
- AMedia Liability Coverage
- BBusiness Interruption Coverage
- CCyber Extortion Coverage
- DPrivacy Liability and Notification Costs
Show answer & explanationAnswer & explanation
Correct answer: D. Privacy Liability and Notification Costs
Privacy Liability and Notification Costs coverage within a Cyber Liability policy is specifically designed to cover expenses related to data breaches, including forensic investigation, legal defense, regulatory fines, and the mandatory notification of affected individuals.
Why the other options are wrong
- A. Media Liability Coverage protects against claims arising from content published online, not data breaches.
- B. Business Interruption Coverage would cover lost profits due to system downtime, not the costs of the breach itself.
- C. Cyber Extortion Coverage would apply if hackers demanded a ransom to release data or systems, which is not the primary scenario described.
Privacy Liability and Notification Costs (Cyber)
A component of Cyber Liability insurance that covers legal defense costs, settlements, regulatory fines, and expenses for notifying affected individuals in the event of a data breach or privacy violation.
- Covers data breach response costs.
- Includes legal, regulatory, notification expenses.
- Crucial for businesses handling sensitive data.
Memory trick: Cyber Shield: Protects Data, Notifies, Recovers