Privacy Liability / Data Breach Insurance

Privacy Liability/Data Breach insurance offers protection by covering the costs to defend, manage, respond and help prevent further loss for an actual or suspected breach of data security.

Cover is in relation to a breach of individual privacy rights or confidentiality relating to personal information and personally identifiable data, for both customer and employee’ information held in any format. This includes credit card details and personal healthcare information, as well as the costs an organisation incurs from mistakes made by a third party service provider, for example, information stored in the cloud.

An organisations failure to protect sensitive, personal or corporate information can result in a breach of contract, negligence claim or legal liabilities and fines attached to privacy law violations such as failing to comply with data breach notification laws and PCI compliance.

At present, the laws in the US are extremely sensitive about this with 46 of the 50 states having mandatory requirements for data breach notification. Similar to the US, the European Commission plans to introduce new legislation in the near future to unify data protection within the EU under a single law (the General Data Protection Regulation). This will impose certain legal obligations on a company when systems have been breached and data potentially exposed.

With strict rules for dealing with the aftermath of a data breach, the costs of notifying affected users can be extremely high, so the policies that we provide include protection for the expenses involved to:

  • Draft official notices (including the printing and postage costs)
  • Cover the costs of an independent security audit, or a forensic investigation into a organisations system to identify the source and scope of the breach
  • Cover the costs to provide a credit monitoring service or an ID theft helpline for the affected third parties

As well as the huge benefit of mitigating the associated costs by transferring the risk to the insurance, the loss of existing or future customers from damage to an organisations brand or reputation following a data breach could be saved by the response and manor in which the breach is addressed and rectified.

For further information or advice on this subject, please contact Adam Lawrence on 0118 916 5484 or complete an enquiry form.

Author: Adam Lawrence | March 19th, 2014

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Adam Lawrence
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767