Breaking with two state court rulings, a federal appeals court found that a commercial general liability policy (CGL) may cover a data breach.
In a case involving the publication of medical records on the Internet, the 4th Circuit U.S. Court of Appeals ruled that coverage in a 2012 Travelers Insurance CGL policy for personal and advertising injury applied to the breach.
Travelers were arguing that it was not required to defend the insured, Portal Healthcare Solutions, which was being sued over the data breach.
The U.S. appeals court ruling is at odds with at least two state court rulings that found no coverage for cyber claims in traditional commercial insurance policies.
The insurance industry has been trying to clarify that CGL policies exclude coverage for data breaches.
Read more about the Portal Healthcare case and read the courts’ opinion at Insurance Journal.com.
Chivaroli and Associates Insurance Services is a full-service brokerage firm specializing in the custom-design and placement of insurance and alternative risk funding solutions for your healthcare organization.