For many companies, the prospect of a costly and highly publicized data breach motivates them to purchase cyber liability insurance to offset the costs associated with such an event, including costs stemming from lawsuits that invariably follow a data breach. As senior associate Ken Kronstadt
explains in his Law360
article, “Unfortunately, insurance coverage is not certain, even where a company has a cyber liability policy in place.”
Ken notes that coverage for a lawsuit where personal identifying information has been exposed, but not yet misused, is particularly uncertain in light of divergent court decisions over the past couple years interpreting the requirements for Article III standing following Spokeo v. Robins
. “Unless and until the U.S. Supreme Court resolves the split of authority — which it may now be poised to do — insurance coverage under cyber liability policies for such a breach may not be available for many policyholders,” Ken wrote.
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