IP Infringement and Invasion of Privacy

Most companies have either limited or no coverage for advertising-related claims, intellectual property infringement and invasion of privacy claims. One of the newest cyber-policies in the marketplace that addresses these issues is the Corporate Expression insurance policy of Media/Professional Insurance. This is a claims-made policy, with claims expense within the limit of insurance. It provides coverage for four broad areas of corporate expression activities, including:

  1. Any type of advertising activity, broadly defined
  2. Gathering, maintaining or disseminating data or information regarding customers
  3. Design, manufacture, labeling, sale and distribution of products
  4. The development, creation or use of computer code, software or systems

The policy provides coverage for eight types of wrongful acts arising out of these corporate-expression activities. Generally, the wrongful acts are broadly defined. They include:

  1. Invasion or infringement of privacy
  2. Wrongful entry
  3. Any type of defamation or disparagement
  4. Trademark infringement
  5. Copyright infringement
  6. Errors or omissions in advertising
  7. Transmission of a computer virus
  8. Unfair competition, conspiracy, and infliction of emotional distress, if based upon one of the previous seven defined Wrongful Acts

Data

A recent policy defines data as “machine-readable information, irrespective of the way it is used or rendered, including but not limited to text, digital media or images.” The policy provides coverage for expenses directly resulting from an “insured event.” The definition of an “insured event” is broad, including:

  1. A network security breach
  2. Unauthorized use of the computer network
  3. A computer virus
  4. Accidental damage or destruction of “data media” (hardware) so that stored data is not machine readable
  5. Corruption or disruption of data due to human error
  6. Damage or destruction of data due to a number of other causes

Covered expenses include the cost to restore, re-collect or replace data; fees of specialists or consultants; and public relations expenses. The policy also provides coverage for cyber-extortion threats and business interruption.