Few corporate risks are asamorphous as cyber liability, and few insurance products are as complex ascyber insurance. Small wonder why so many different insurancepolicies present a modicum of cyber coverage, but none offercomprehensive protection.

The problem can be traced to the word “cyber,” so broad that itencompasses a multitude of financial exposures, from denial of service attacks to computer viruses to a cup ofcoffee destroying a laptop. Other cyber risks include stolen orcorrupted digital information, Internet-based libel and slander,and even such extraordinary hazards as an office building'scomputer-operated HVAC system shut down by a hacker.

The insurance industry has responded to these wide-ranging riskswith a variety of insurance policies picking up differentexposures. Errors and omissions liability, commercial crime andgeneral liability insurance policies all offer some protections.For third party liability risks—a hacker breaching a company'sdatabase to steal the personally identifiable information ofcustomers and/or employees (the third parties)—insurers haveaddressed this peril with cyber liability insurance.