Cyber insurers commonly require insureds to complete detailed applications, often including extensive technical disclosure and risk self-assessments. The complaint recently filed by the insurer in Columbia Casualty Co. v. Cottage Health System illustrates the pitfalls in these requirements.
Cottage Health, an operator of a hospital network, suffered a data breach in 2013 resulting in thousands of its patients’ private medical information being publicly disclosed. In addition to other losses, Cottage Health paid $4.125 million to settle a putative class action in 2014 and faces additional proceedings arising from the breach. Columbia’s lawsuit denies all coverage for the breach and seeks to rescind its policy due to the insured’s alleged failure to comply with the cybersecurity practices described in its application.
Continue Reading Cyber Insurer Seeks to Void Data Breach Coverage Because of Purported Misstatements in Policy Application