Data Breach Covered Under Traditional Policy, 4th Circ. Says

By Jeff Sistrunk (April 11, 2016, 2:24 PM EDT) -- Travelers must defend medical records company Portal Healthcare against a class claim that its failure to secure a server caused records to be accessible to unauthorized users, the Fourth Circuit affirmed Monday, agreeing with a lower court that the security breach is covered under Travelers' commercial general liability policy.

In an unpublished opinion, a panel of the Fourth Circuit adopted the reasoning of a Virginia district court, which held in August 2014 that policyholder Portal Healthcare Solutions LLC had published, and therefore disclosed, confidential patient information. As a result, the underlying complaint falls within the scope of Portal's policy with Travelers,...

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