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Information Security Protection Policy (ISO)

Exclusions 

EC 00 10

1. Based upon, attributable to or arising out of lightning, earthquake, hail, volcanic action or any other act of nature.
1. Act of Nature

Any claim arising out of or attributable to a natural event is excluded here. Such claims related to first-party losses are intended to be covered on property insurance policies.

Variations to watch for:
  • Most policies do not contain a similar exclusion.

Policy Language

Explanation

2. Based upon, attributable to or arising out of:

a. War, including undeclared or civil war or civil unrest;

b. Warlike action by military force, including action hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or

c. Insurrection, rebellion, revolution, usurped power, or action taken by government authority in hindering or defending against any of these.

2. War

This exclusion does not apply to acts of terrorism. 

3. Based upon, attributable to or arising out of the dispersal or application of pathogenic or poisonous biological or chemical materials, nuclear reaction, nuclear radiation or radioactive contamination, or any related act or incident, however caused.
3. Nuclear
4. Based upon, attributable to or arising out of bodily injury or physical damage to or destruction of tangible property, including loss of use thereof.

Bodily injury means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

4. Bodily Injury or Property Damage

Claims for bodily injury or property damage are covered on the CGL policy.

5. Based upon, attributable to or arising out of any unexplained or indeterminable failure, malfunction or slowdown of the "computer system", including "electronic data" and the inability to access or properly manipulate the "electronic data".
5. Unexplained Failure or Malfunction

This policy is not an "all-risk" policy. Each claim or loss must be attributable to a specific cause detailed in at least one insuring agreement.

6. Based upon, attributable to or arising out of any "interruption" in normal computer function or network service or function due to insufficient capacity to process transactions or due to an overload of activity on the "computer system" or network. However, this exclusion shall not apply if such "interruption" is caused by an "e-commerce incident".
6. Insufficient Capacity

The policy does not apply to losses caused by insufficient capacity to process transactions, unless such an incident is caused by a virus, malicious code or denial of service attack.

7. Based upon, attributable to or arising out of a complete or substantial failure, disablement or shutdown of the Internet, regardless of the cause.
7. Internet Failure

A loss must be limited to the insured's computer system and not attributable to a total shutdown of the Internet that affects all users.

8. Based upon, attributable to or arising out of any failure of, reduction in or surge of power.
8. Power Surge

Loss attributable to a power surge can be easily averted with adequate prevention measures implemented by the insured. In any event, some types of losses caused by power surge may be covered by a property insurance policy.

9. Based upon, attributable to or arising out of any actual or alleged violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) and its amendments, or similar provisions of any federal, state or local statutory or common law.
9. RICO Violations
10. Based upon, attributable to or arising out of any malfunction or failure of any satellite.
10. Satellite Failure
11. Based upon, attributable to or arising out of any oral or written publication of material, if done by an "insured" or at an "insured's" direction with knowledge of its falsity.
11. Known Falsity

This exclusion applies primarily to the insuring agreement for Web Site Publishing Liability. The intent is to avoid paying claims arising out of statements that the insured knew to be hurtful. As a practical matter, the company must defend the insured until it is clear that the insured knew he was lying.

12. Based upon, attributable to or arising out of an "insured's" assumption of liability by contract or agreement, whether oral or written. However, this exclusion shall not apply to any liability that an "insured" would have incurred in the absence of such contract or agreement.
12. Contractual Liability

There is no coverage for a claim or loss based solely on a contractual assumption of liability.

13. Based upon, attributable to or arising out of any actual or alleged patent or trade secret violation, including any actual or alleged violation of the Patent Act, the Economic Espionage Act of 1996 or the Uniform Trade Secrets Act and their amendments.
13. Patent or Trade Secret Violation

This exclusion primarily precludes coverage for any claim under the insuring agreement for Web Site Publishing Liability arising out of violations of patents or trade secrets.

14. Based upon, attributable to or arising out of:

a. The actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time; 

b. Any request, demand, order or statutory or regulatory requirement that any "insured" or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants"; or

c. Any "claim" or "suit" brought by, or on behalf of, any governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants".

14. Pollution

This is an absolute exclusion of any claim attributable to a pollution incident.

15. Based upon, attributable to or arising out of any "claim", "suit" or other proceeding against an "insured" which was pending or existed prior to the "policy period", or arising out of the same or substantially the same facts, circumstances or allegations which are the subject of, or the basis for, such "claim", "suit" or other proceeding.
15. Prior Claim, Suit or Proceeding

If the insured is named in a written demand or law suit prior to the inception of this policy, any claim arising out of that demand or suit is not covered. It may be covered by a prior policy.

16. Based upon, attributable to or arising out of an "insured's" employment practices including, but not limited to, termination of employment, demotion, reassignment, discipline, harassment, coercion or refusal to employ regardless of whether the "insured" is liable as an employer or in any other capacity.
16. Employment Practices
17. Based upon, attributable to or arising out of any "wrongful act" or "interrelated wrongful acts" that occurred before the Retroactive Date, if any, shown in the Declarations.
17. Prior to Retroactive Date

A retroactive date only applies to the third-party liability insuring agreements (1, 2 and 3) and if a date is shown in the Declarations. 

18. Based upon, attributable to or arising out of the same facts, "wrongful acts" or "interrelated wrongful acts" alleged or contained in any "claim" which has been reported, or in any circumstances of which notice has been given, under any insurance policy of which this Policy is a renewal or replacement.
18. Claim Related to Claim Already Reported
19. Based upon, attributable to or arising out of any criminal, dishonest, malicious or fraudulent act or any willful violation of any statute or regulation committed by an "insured", acting alone or in collusion with others. However, this exclusion shall not apply to dishonest, malicious or fraudulent acts committed by an "employee" which give rise to a "claim" or "loss" covered under Insuring Agreement 2. Security Breach Liability. 

With the exception of "claims" excluded under Exclusion 13., we will defend "claims" first made against an "insured" alleging such acts or violations until final adjudication is rendered against that "insured". Final adjudication rendered against one "insured" shall not be imputed to any other "insured".

We will not provide indemnification for any "claim" to which any "insured" enters a guilty plea or pleads no contest and we will not provide a defense from the time we become aware that any "insured" intends to so plead.

19. Dishonest or Willful Act

This is an absolute exclusion of any claim attributable to a dishonest or willful act by any insured, with a couple of notable exceptions:
  • With regard to insuring agreement 2 for Security Breach Liability, the exclusion does not apply to a dishonest, malicious or fraudulent act committed by an employee of the named insured, but it does apply to a criminal act or willful violation of a statute or regulation by an employee.

  • The insurance company will defend a claim against all insureds that are attributable to a dishonest act until final adjudication proves there was a dishonest act by an insured. If that happens, the exclusion only applies to the insured that committed the act but not other insureds who were accused.
Endorsement EC 20 10 (Provide Coverage for Dishonest, Malicious or Fraudulent Acts Committed by Employees) amends the exclusion to cover dishonest, malicious or fraudulent acts committed by employees, but the exclusion still applies to a criminal act or willful violation of a statute or regulation by an employee.The definition of "insured" includes employees, and the definition of "employee" includes temporary and leased employees, officers, partners and volunteer workers.

20. Based upon, attributable to or arising out of any action or proceeding brought by, or on behalf of, any governmental authority or regulatory agency including, but not limited to: 

a. The seizure or destruction of property by order of a governmental authority; or

b. Regulatory actions or proceedings brought by, or on behalf of, the Federal Trade Commission, Federal Communications Commission or other regulatory agency, except when covered under Paragraph b. of Insuring Agreement 2. Security Breach Liability.

However, this exclusion shall not apply to actions or proceedings brought by a governmental authority or regulatory agency acting solely in its capacity as a customer of the "named insured" or of a "subsidiary".

20. Governmental or Regulatory Claim

The policy does not apply to claims brought by governmental or regulatory bodies, except as is provided by paragraph "b" of the insuring agreement for Security Breach Liability.

21. Based upon, attributable to or arising out of costs associated with upgrading or improving the "computer system" regardless of the reason for the upgrade.
21. Computer System Upgrades

This exclusion does not preclude coverage for incidents occurring during a system upgrade. It does preclude coverage for any costs associated with an upgrade even if the upgrade is made after an otherwise-covered loss.

22. Based upon, attributable to or arising out of any "claim" brought or alleged by one "insured" against another, except for a "claim" brought or alleged by an "employee" against an "insured" as a result of a "security breach".
22. Insured versus Insured

There is no coverage for one insured for a claim brought by another insured, unless claim involves a security breach of private information alleged by an employee.

23. Based upon, attributable to or arising out of unintentional errors or omissions in the entry of "electronic data" into the "computer system". 
23. Unintentional Errors in Data Entry

This exclusion precludes coverage for any claim or loss arising out of unintentional errors or omissions in the entry of data into the insured's system.

Endorsement EC 20 11 (Provide Coverage for Unintentional Errors and Omissions) deletes this exclusion.

Other Exclusions by Endorsement:

Endorsement EC 20 16 (Exclusion – Social Media) excludes claims or loss under Insuring Agreement #1 (Web Site Publishing Liability) arising out of a wrongful act that occurs through the authorized or unauthorized use of a social media web site or blog by an employee.

Endorsement EC 20 17 (Exclusion – Software Infringement) excludes claims or loss arising out of any infringement of copyrighted software, software code or software license.