The scale of some recent cyber events has been extraordinary. Target reports that 70 million people (almost 25% of the U.S. population) were affected by its recent breach. CNN recently reported that in South Korea there was a breach that affected 40% of its citizens. The staggering impact of these events is leading companies to seek protection through both technology and financial products, such as insurance. Insurers typically attempt to avoid this sort of enormous exposure with terrorism exclusions, and it is reasonable to expect aggressive insurers to rely upon such exclusions to avoid their coverage obligations. In a client alert, a Hunton & Williams Insurance Litigation & Counseling partner outlines how after 9-11, insurers added terrorism exclusions to their policies in order to provide coverage for losses arising out of terrorism only if special coverage was acquired.
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