Your company’s computer system has been compromised by a hacker. From your initial investigation, you discover that the hacker has accessed proprietary company information and customer information including Social Security Numbers, caused an interruption in your internal computer system, and caused an interruption in service to your customers. You also realize that this may just be the tip of the iceberg. One of the first questions that arises when such an event occurs is likely to be the extent to which this event will be covered by insurance. Will your traditional commercial general liability policies (“CGL Policies”) cover the cyber attack? What about your separate Cyber Liability Insurance Policies (“CLI Policies”)?

Recent headlines have been replete with high-profile stories of large cyber attacks affecting a variety of industries including, for example, the health care sector, the retail sector, and the financial sector. One of the most publicized cyber attacks affecting the retail industry was the 2013 Target Corp. data breach that reportedly affected approximately 110 million Target customers. The Target breach and the related insurance issues are addressed herein.