The Hartford Financial Services Group added First Party Data Privacy Expense coverage, along with Cyber Extortion Expense coverage, to its FailSafe suite of technology liability coverages. These new coverages are offered as an endorsement to the FailSafe GIGA and FailSafe TERA policies.

“Many technology companies are at risk for improper dissemination of non-public personal information or violation of data privacy laws. This endorsement is designed to address direct costs that would not be covered by third party technology professional liability coverage,” said David J. Selembo, assistant vice president of professional liability, underwriting & operations for The Hartford’s Technology Practice Group, which provides insurance coverage tailored to the risks of technology firms.

The coverage is currently available in 27 states, including Pennsylvania and New Jersey, and by June, The Hartford expects it to be available in 45 states and jurisdictions, including New York, Virginia, Maryland and the District of Columbia, the company said.

The average per-record cost of a data breach is $202, according to a 2008 Ponemon Institute study, meaning the cost of a breach involving just 500 records could exceed $100,000.

The Hartford’s Data Privacy Expense coverage pays for actual expenses incurred as a result of a policyholder’s negligent acts, errors or omissions that result in the improper dissemination of non-public personal information, or a breach or violation of data privacy laws.

Specific components of the coverage may include: notification expenses incurred to comply with notification laws; crisis management expenses incurred for fees and costs associated with hiring a crisis management firm to perform services that minimize potential harm and maintain or restore confidence in the policyholder; data privacy regulatory and credit monitoring expenses incurred in connection with a statutory mandate requiring credit monitoring for third parties in compliance with data privacy laws, legal expenses in defense of a data privacy regulation proceeding, and certain fines or penalties, where insurable, in connection with a data privacy regulation proceeding; and cyber investigation expenses incurred to have a third party investigate the policyholder’s computer system to determine the source of a data privacy breach.

The Hartford’s Cyber Extortion Expense coverage addresses expenses incurred by a policyholder in the event of an extortion threat to cause an actual interruption, suspension, or failure of the company’s computer system, including the failure to prevent unauthorized access or unauthorized use of the computer system.