Resource Library

Data Compromise, CyberOne Coverage Conditions

Date: August 2018

MCIT launched specialized coverage for data compromise and cyber-related exposures Jan. 1, 2017. Data compromise, CyberOne coverage conditions apply. Any incident or suspected incident involving the compromise of data, data breaches or computer attack requires the member’s immediate action, specifically, contacting the MCIT claims team.

MCIT claims staff will coordinate a call with the member and Hartford Steam Boiler (HSB)—the cyber insurer—claims team to develop a course of action unique to the situation.

Depending on the circumstances, the member may be required to engage outside consultants/experts directly to assist. These costs are reimbursable to the limits of coverage. The member remains responsible for its deductible.

The coverage fills an important need for all members when dealing with the inadvertent release of sensitive or private data, whether from accidental release, or from the loss or theft of equipment or devices containing the information. 

The suite of coverages also responds to incidents of hacking, propagation of viruses and malware within member computer systems and exposure to cyber-extortion or incidents of ransomware.

Coverage is comprised of four sections, each with a coverage limit of $50,000.

  1. First Party Data Compromise—Reimburses a member for expenses incurred after an actual or suspected data compromise including:
    • notifying affected individuals of a data compromise.
    • retaining a computer expert to determine the nature and extent of the data compromise.
    • retaining outside legal counsel to assist members in determining how best to respond to a data compromise.
    • retaining a public relations firm.
    • providing services, including credit monitoring and identity restoration, to individuals affected by a data compromise.
    • covering regulatory fines and penalties such as those imposed by the payment card industry.
  2. Third Party Data Compromise—Defends a member if a claim is made by someone affected by a data compromise.
  3. First Party CyberOne—Reimburses a member for expenses incurred after a computer attack (unauthorized access to a member’s computer system including damage arising from malicious code, viruses, worms, Trojans and spyware) to include:
    • data restoration, data re-creation, system restoration, loss of business and public relations.
    • cyber-extortion expenses including the cost of a negotiator, investigator and amounts paid to eliminate the cyber-extortion threat.
  4. Third Party CyberOne—Defends a member if a claim is made by someone affected by a computer attack against a member.

Because of the specialized and technical nature of these exposures, MCIT partnered with HSB to both underwrite the coverage and provide assistance to members through the claims adjustment and response process. HSB has several years of experience in the cyber-insurance market and brings resources with the expertise to assist in claim situations.

Important Conditions of Coverage

When an incident arises, members may want to react quickly to address the situation. This is understandable given recent headlines and negative publicity related to hacking and breaches. Before issuing notifications to affected individuals or diving into systems issues to determine the extent of a hack or malware, the member needs to pause and consider the important conditions, or rules, necessary to ensure coverage through HSB.

HSB is keenly aware of the time-
sensitive nature of these occurrences and has a process in place to facilitate
a quick, collaborative response.

Examples of policy conditions to which members must adhere to help ensure the availability of coverage include:

  • Immediately report all claims or suspected claims to MCIT after the date of discovery before engaging any specialists or issuing notifications to affected individuals in the case of a data compromise event. A claim reporting form is available on MCIT’s website (
  • Participate in a pre-notification phone consultation with MCIT and HSB prior to notifying individuals affected by a data breach or compromise.
  • Do not admit liability, settle a claim or incur defense costs without prior written consent from MCIT and/or HSB.
  • Do not voluntarily make a payment, assume any obligation or incur any expense without prior written consent from MCIT and/or HSB.
  • Maintain appropriate:
    • physical security for the premises, computer systems and hard copy files.
    • computer and Internet security.
    • backups of computer data at appropri-ate intervals.
    • credit card, debit card and check payment processing protection.
    • protocols for disposing of files containing sensitive or private information.

Learn More About Data Compromise, CyberOne Coverage Conditions

The information provided above is an overview summary only. Coverage for a specific claim depends on the facts of the claim as compared to all definitions, limits, provisions, conditions and exclusions contained in the MCIT Coverage Document.

MCIT recommends that members review the Data Compromise and CyberOne Coverage section of the MCIT Coverage Document in its entirety and communicate internal reporting protocols across departmental lines to ensure prompt reporting of all actual or suspected claims.

Questions about the data compromise and CyberOne coverage should be directed to the member’s MCIT risk management consultant at 1.866.547.6516. Members can also review the Data Compromise, CyberOne Coverage section of the MCIT Coverage Document.

Originally published as “MCIT Data Compromise, CyberOne Coverage: Meet Conditions to Ensure Coverage Applies,” MCIT Bulletin, September 2017