Jenner & Block

Insurance Law Update: To Limit Or Not To Limit - New Cyber Case Examines the Scope and Potential Application of Coverage Sublimits

Cyber insurance policies, like most insurance policies, often include “sublimits” within the overall limit of liability, which limit the amount of insurance available under certain coverage sections or for certain types of loss an insured may experience as a result of a cyber incident.  Policyholders who do not understand or fully appreciate how these sublimits may impact their overall coverage may later find themselves engaged in a contentious dispute with their insurer over whether their cyber insurance policy covers only a small fraction of their potential losses or their entire loss.  Hotel Monteleone, a historic New Orleans hotel, is currently pursuing just such a case against its insurer.  This issue of the Insurance Law Update discusses the need to carefully review and understand the potential application of any sublimits included in the individual coverage sections within their cyber insurance policies.