Cyber Incidents Accelerate Arms Race Over Broader Coverage

D&O and Management Liability Insurance attorney Thomas Bentz was quoted in a Law360 article exploring the nuanced landscape of insurance coverage in response to the growing variety and scale of cyber-related incidents. Mr. Bentz said a common misstep is for companies to rely too much on cyber insurance policies without fully understanding their actual business exposures and aligning coverage accordingly. For example, he explained that cyber liability insurance covers losses from an incident, whereas tech errors and omissions, or tech E&O, coverage can offer protection to companies being sued by customers for service interruptions caused by an incident. He also underscored the risks of not being proactive about understanding policy specifics from the outset, noting this can lead to significant financial and operational impacts post-incident.

"They either do the work upfront and know the answer as best as they can, or they find out when they have an incident that the policy didn't respond the way they thought it was going to, and it can be a very expensive learning lesson," Mr. Bentz commented.

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