Cybersecurity » Cyber Policies That Exclude What The Customer Wants To Insure

Cyber Policies That Exclude What The Customer Wants To Insure

July 7, 2015

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There is a “troublesome provision” in some data breach liability policies, according to Dennis Cusack from the law firm Farella Braun + Martel. It’s a gap, he says, that would seem to exclude “the very risk the insured was seeking to insure.” He calls it the Mistake Exclusion and says what it does is exclude coverage in cases where the insured is deemed to have failed to take proper security precautions that were identified in the contract. “But,” he asks, “isn’t liability insurance supposed to do just that – protect against the insured’s mistakes, innocent or negligent?” He suggests that insureds and brokers negotiate this kind of exclusion out of the contract.

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