Insuring Against Cybercrime

New York State Bar Assoc. Journal, May 10, 2019, Vol 91, No 4

5 Pages Posted: 2 Jun 2019

Date Written: May 10, 2019


Cyber Insurance is used to protect business and individuals from internet-based risk. Companies that use a computer, receive, transmit electronic data, store information or connect to the internet are exposed to cyber liability. Cyber liability encompasses first-and-third-party risks such as privacy issues, virus transmission and infringement of intellectual property. Privacy exposure can also involve human error such as a lost laptop.

First party insurance is coverage against what happens to the insured when injury and damage are caused to it. Third party insurance protects the insured by means of indemnity or indemnification from actually having to pay all or part owned for causing injury and damages to someone else.

Traditional liability products do not address internet exposure and risks or at best only provide limited coverage. The standard commercial general liability policy has excluded data related liability. Cuber liability policies are unique. A few companies covering cyber insurance are The Hartford, AIG, Zurich & Travelers.

A data breach is a nightmare. Lawyers need to understand cyber insurance for their clients and their own law firms. Law firms have a special exposure when hacked because of client files with personal and other sensitive information.

Keywords: Cyber Insurance, Cyber Risks, Data Breach, Hacking, CyberCrimes, Cyber Extortion

Suggested Citation

Johnson, James A., Insuring Against Cybercrime (May 10, 2019). New York State Bar Assoc. Journal, May 10, 2019, Vol 91, No 4, Available at SSRN:

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