Merger and acquisition (M&A) activity hit an all-time high in 2015. Simultaneously, awareness of cyber-related risks and the ability to transfer those risks through cyber insurance also increased.
But while many people think of cyber insurance when confronted with a data breach, it may not be quite so top of mind in the context of a merger or acquisition. It should be, though, because cyber policies typically contain provisions that directly affect coverage in light of such transactions. Enterprises should take a close look at their cyber policy provisions early on in the deal-making process so that coverage for the affected enterprises can be secured.
While Commercial General Liability (CGL) policies often require notice of newly acquired organizations within a specified number of days (e.g., 90 or 180 days) after an acquisition, cyber policies may contain specific requirements that the insured must satisfy to obtain coverage for subsidiaries acquired or created, or for entities involved in mergers or consolidations.
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