Last month, Part One of this article addressed the role of traditional insurance in covering cyber risks. This second installment first continues the discussion of traditional insurance coverages and then addresses specialty “cyber” policies.
3) Potential Coverage Under Property Policies -
Injury to Covered Property: Most companies have insurance coverage that is intended to insure the company’s assets. By way of example, the 2007 standard form ISO commercial property policy covers “direct physical loss of or damage to Cove red Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.” ISO Form CP 00 99 06 07 (2007), Section A. Such policies may be in the form of broadly worded “all risk,” “difference in conditions,” “multiperil” or “inland marine” policies.
As discussed previously in connection with CGL coverage, a company’s ability to recover for cyber attacks under all risk property policies may turn upon whether data loss comprises “physical loss of or damage” to “covered property.”
Originally published in The Insurance Coverage Law Bulletin, Vol. 12, No. 5 - June 2013.
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