Insurers and their policyholders have been playing a game of tug-of-war over whether lawsuits arising out of data security breaches trigger a duty to defend under commercial general liability (CGL) insurance policies. The insurers seemed to have some momentum in arguing that a data security breach does not involve the “publication” required by CGL policies’ “personal and advertising injury” coverage grant. But policyholders have won a couple of significant victories on this point, including the most recent one. Policyholders should not allow success in those battles to lull them into believing that they’ve won the tug-of-war, though. The outcome of any coverage dispute in this area is highly fact-dependent, and many insurers are adding exclusions to their policies to eliminate the possibility of coverage for these claims altogether.

Most CGL policies cover damages for “personal and advertising injury” arising out of any one of a number of defined “offenses.” The offense most often at issue in litigation arising out of a data security breach is the “oral or written publication, in any manner, of material that violates a person’s right of privacy.”

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