Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Commercial LinesMedium
A Florida-based software development firm specializing in medical applications stores sensitive patient data on its servers. They have a comprehensive Commercial Package Policy (CPP) with standard property and liability coverages. They are concerned that their CPP would not adequately cover losses arising from malicious code that corrupts their data, or a denial-of-service attack that makes their services unavailable. Which specialized policy or coverage would best fill these gaps?
- ABusinessowners Policy (BOP)
- BCyber Liability Insurance
- CDifference in Conditions (DIC) Policy
- DProfessional Liability Insurance
Show answer & explanationAnswer & explanation
Correct answer: B. Cyber Liability Insurance
Cyber Liability Insurance is specifically designed to cover risks associated with information technology and data, including data corruption from malicious code, network security breaches, and business interruption due to cyberattacks like denial-of-service. A standard CPP typically excludes these cyber-related perils.
Why the other options are wrong
- A. A Businessowners Policy (BOP) is a package policy for small to medium businesses, offering property and liability, but generally has the same cyber exclusions as a CPP.
- C. A Difference in Conditions (DIC) Policy provides 'all-risk' coverage for perils typically excluded by standard property policies (e.g., flood, earthquake), but generally not cyber perils.
- D. Professional Liability Insurance (E&O) covers errors and omissions in professional services, not cyberattacks or data breaches.
Cyber Liability Insurance
Insurance designed to protect businesses from financial losses and legal liabilities resulting from cyberattacks, data breaches, and other technology-related risks.
- Covers data breaches, network security failures.
- Includes legal, forensic, notification costs.
- Often covers business interruption from cyber incidents.
Memory trick: Cyber Shield: Data, Network, Response