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 cloud-based servers. They are concerned about the financial impact of a data breach, including regulatory fines, notification costs, and potential lawsuits. Which specific cyber liability coverage component would primarily address the costs associated with notifying affected individuals and providing credit monitoring services?
- ANetwork Security Liability
- BRegulatory Fines and Penalties
- CPrivacy Liability
- DBusiness Interruption
Show answer & explanationAnswer & explanation
Correct answer: C. Privacy Liability
Privacy Liability coverage specifically addresses the costs associated with a data breach involving personal information. This includes expenses for notifying affected individuals, credit monitoring, and forensic investigations to determine the cause and scope of the breach.
Why the other options are wrong
- A. Network Security Liability covers claims arising from unauthorized access or denial-of-service attacks on the insured's network, not directly the costs of notifying individuals.
- B. Regulatory Fines and Penalties covers fines imposed by regulatory bodies following a breach, which is distinct from notification costs.
- D. Business Interruption covers loss of income and extra expenses due to a cyber event, not the costs of notifying affected individuals.
Cyber Liability: Privacy Liability
A component of cyber liability insurance that covers expenses associated with a data breach involving personal identifiable information (PII) or protected health information (PHI), including notification costs, credit monitoring, and forensic investigations.
- Covers costs related to data breaches.
- Includes notification, credit monitoring, and forensic expenses.
- Applies to PII and PHI.
Memory trick: Cyber Liability: Think 'PREVENT, RESPOND, RECOVER' from digital threats.