Cyber Liability Insurance Claim Attorneys in Chandler, Arizona

The pandemic brought many changes to life in the United States, including how businesses operate. Suddenly, as regulations forced many companies to move their staff offsite, quite a few employees started working from home. This meant that many actions and transactions that normally would take place in a structured business setting were being handled from home over the Internet.

With cyber activity increasing, and with many of the home networks not as secure as those in a business setting, it’s no wonder that cyber fraud and cyber security lapses went up. The Association of Certified Fraud Examiners (ACFE) reports that during the pandemic cyber fraud rose 89 percent, and has continued on an elevated pace ever since. 

With the increasing reliance of businesses on cyber communications and transactions, the risk of liability from a cyber event—such as a breach and theft of stored customer data—has increased as well. Businesses have turned to buying cyber liability insurance to help cover any losses or damages their business may suffer. The problem here, though, is that insurers offer varying versions of cyber insurance, and many have exclusions or limitations that can end up with a claim being denied.

If you have questions or concerns about cyber liability and cyber insurance protection in Chandler or elsewhere in Arizona, contact Arnett & Arnett, PC. We have more than four decades of experience in dealing with insurance company bad faith tactics and can help you navigate the claims process or file an appeal. As insurance attorneys, we proudly serve individuals in and around Chandler, Phoenix, Tucson, Flagstaff, and the rest of the state. 

What Is Cyber Liability Insurance?

Most businesses will purchase commercial liability insurance, which generally will cover events such as injury claims by customers, legal disputes with vendors or contractors, property damage, and more. But with the increasing reliance of nearly every business on data storage and digital resources and the use of the Internet for almost all dealings, the risk of cyber claims is almost omnipresent. 

For instance, if you have a customer database that is hacked or stolen, you can face legal and regulatory consequences. The same holds true if your data concerns health care records. Your own trade secrets can be at risk, too. Cyber liability insurance is aimed at providing the same sort of protection as a commercial liability policy but for online and data losses and claims. 

Insurers all have different parameters for what they offer to cover—and what they decline to cover—in their cyber insurance policies. When you go shopping for one, you must read the fine print and make sure you won’t run into an exclusion or limitation of coverage when you try to make a claim. Better yet, contact an insurance attorney for guidance. 

Common Claims

A breach, or hack and theft, of customer or other data is a major concern and represents a significant percentage of cyber insurance claims. You must also be aware of cyber fraud. For instance, a manufacturer in Ohio received what looked like a legitimate invoice via email and ended up paying $315,000 for materials needed. The email was a fraud. 

Extortion through ransomware and spyware that make it past any cyber security protections or malware are also a serious concern. A business could end up paying thousands of dollars or more just to get the use of their data restored. 

Reasons for Claim Denials

Insurance policies contain language designed to protect the parent company and make it possible to deny claims based on certain factors. Cyber insurance is no different. Some of the language/exclusions contained in these policies can include: 

• FAILURE TO MAINTAIN: Your business makes a claim, and the insurer responds by saying you failed to maintain adequate cyber security measures. Businesses must constantly upgrade their security—not only for the sake of insurance claims, but for the sake of their data as well. 

• PCI FINES AND ASSESSMENTS: Insurers have also been known to deny claims for PCI (Payment Card Industry) fines and assessments for cardholder data theft or disclosure. If your business relies on online credit and debit card payments, you may be able to avoid liability by using a third-party PCI service provider. 

• CYBER EXTORTION AND RANSOMWARE: While policies may cover payments for cyber extortion and ransomware, they may also have limits in place. They may also refuse to cover any claim for lost profits resulting from extortion or ransomware