Jenner & Block

Client Advisory: Insurance Coverage for Data Breaches

Data security breaches have skyrocketed in recent years.  Of the more than 1.8 trillion gigabytes of digital information created in 2011, only 30% of that information is subject to minimal security. 

The average cost of a data breach peaked at more than $7 million in 2010.  Insurance coverage for data security breaches has been pursued under a number of different policies, but successful claims for policyholders have most commonly been based on commercial general liability (“CGL”) policies – in particular pursuant to provisions for “property damage” and “advertising injury” to third parties.  The advantages and challenges of seeking data breach coverage under these provisions are examined  by Matthew L. Jacobs and Sabrina N. Guenther.