National Union Fire Insurance Company of Pittsburgh, Pa. (National Union), a member company of American International Group Inc. (AIG), reported the availability of Security & Privacy Insurance, a new policy coverage addressing the liability of companies accused of negligently handling private or confidential data.
In 2005, more than 134 computer security breaches affecting potentially more than 57 million individuals were reported, according to the Identity Theft Resource Center. Also in 2005, companies incurred an average cost of $14 million per breach incident, with costs ranging as high as $50 million, according to a survey conducted by the Ponemon Institute.
“Liability arising out of privacy and security matters is costing millions of dollars for companies of all sizes and industries,” said Michael Smith, president of the Professional Liability Division of National Union. “Beyond the financial consequences, new laws that require admission of data breaches are increasing public concern and potential liabilities. We created Security & Privacy Insurance coverage to fill the gaps in traditional insurance coverage for these issues.”
National Union’s Security & Privacy Insurance addresses the liabilities that arise when private or confidential information is put at risk by any number of means. These may include a failure of computer security or wrongful release or disclosure of information by the insured, the insured’s employee or another third party. These liabilities are typically not covered by conventional professional liability, commercial general liability or media liability insurance policies.
The Security & Privacy Insurance policy features: coverage for defense costs (within policy limits); duty to defend coverage; coverage on a ‘pay on behalf of” basis; and defense cost coverage for certain regulatory actions.
Companies in all industries can obtain Security & Privacy Insurance as part of the AIG netAdvantage Suite for network infrastructure and cyber risk protection. Limits up to $25 million are available. Technology service providers can combine Security & Privacy Insurance with any of the professional liability and network security insurance modules in AIG ProTech Modular Edition 2005, which combines numerous coverages in one policy, with one limit up to $25 million.
For more information on Security & Privacy Insurance, visit www.aignationalunion.com or e-mail email@example.com.
Was this article valuable?
Here are more articles you may enjoy.