Is there cover for the loss of non-electronic data?

  • Yes there is, but there are limitations on this cover.
  • Insuring Agreement 4 (Data Recovery and Loss of Income) provides cover for the Insured’s own damage loss. However, the loss must have arisen out of

(i)    the wilful misuse of the Insured’s computer network, or

  • Example: A hacker sends a message to the Insured’s clerical staff which confuses them into shredding the wrong documents. As a result the Insured loses money when it can no longer determine which clients it must bill for its services.

(ii)  human error or a software bug, or

  • The Insured’s paper recycling contractors take the wrong box and client can no longer determine which clients it must bill for its services.

(iii)  physical damage to the Insured computers

  • Insuring Agreement 1 (Professional Services) provides cover for liability arising out of the Insured’s negligence while providing professional services
    • There is no cover for the Insured’s liability under this section because of a policy wide exclusion on claims arising out of property damage.
  • Insuring Agreement 3 (Security and Privacy) provides cover for liability arising when information is destroyed or disclosed to unauthorised parties. This needs to happen in terms of a:
    • Security breach – provided that the damage to non-electronic data arose out of the misuse of a computer network.
    • Privacy breach which means a breach of confidentiality or any right to privacy.
    • There is no cover for the Insured’s liability under this section because of a policy wide exclusion on claims arising out of property damage.
Subject: 
Cyber Risk