Legal Aspects of Cyber Insurance and Dispute Resolution
In the modern business environment, cyberattacks are no longer a hypothetical risk; they are a real threat capable of destabilizing a company's financial stability. Cyber insurance is a risk management tool that compensates for losses caused by cyber incidents. However, cyber insurance is a relatively new and complex product in the Georgian insurance market. Policies often contain specific exclusions, technical terminology, and strict prerequisites (e.g., adherence to specific security standards). Legal support is essential both at the stage of signing the insurance contract and when an insured event occurs, ensuring the company actually receives the compensation it is due.
Cyber insurance legal services cover the full cycle—from risk assessment to claim settlement. Specialists on our platform offer the following services:
- Policy Audit and Negotiation: Detailed analysis of insurance contract terms, clarifying the definition of "covered cyber event," and correcting ambiguous clauses (e.g., "war and cyber war") in the client's favor.
- Risk Assessment: Evaluating the company's legal and technical readiness against insurance requirements to eliminate grounds for claim denial.
- Claim Management: Immediate legal assistance upon incident occurrence—drafting the notification to the insurer correctly, collecting evidence, and substantiating the loss amount.
- Third-Party Claim Management: If clients or partners are harmed by a cyberattack, the lawyer manages their lawsuits, the costs of which are often covered by insurance.
- Disputes with Insurers: Protecting interests in court and arbitration in cases of claim denial or underpayment.
In practice, disputes often arise regarding what constitutes a "cyber event." For example, if an employee accidentally deletes a database, the insurer might deny coverage, arguing it was "human error" and not a "hacking attack." Ransomware cases are also problematic—does the policy cover ransom payments? Under Georgian law, financing crime is prohibited, creating a legal conflict. Another scenario involves an insurer denying a claim on the grounds that the client failed to update antivirus software or lacked two-factor authentication, considering it a breach of contract.
The field of cyber insurance is regulated by the Civil Code of Georgia (Insurance Chapter) and the Law of Georgia on Insurance. However, the terms of the insurance contract itself are decisive. It is also important to consider the Law on Personal Data Protection, as cyber insurance often covers fines imposed for data breaches (unless prohibited by law) and legal costs. The lawyer's role is to harmonize these complex regulations and contractual terms to protect the client's interests.
Working with a lawyer begins before purchasing a policy. The specialist helps you select coverage that matches your real risks (e.g., business interruption, data recovery, cyber extortion). During an insured event, the lawyer acts as the primary communicator with the insurance company, reducing bureaucratic barriers and increasing the chances of receiving full compensation.
Legal.ge is the ideal place to find lawyers working at the intersection of insurance law and cybersecurity. Cyber insurance is not a standard product; it requires specific knowledge. Do not leave your business vulnerable to ambiguous insurance terms—get qualified advice from our experts.
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