Materiality Matters: D&O Insurers Seek Clarity On SEC Disclosure Rules.

The U.S. Securities and Exchange Commission (SEC) implemented rules in July 2023 that require public companies to disclose material cybersecurity incidents and information about their cybersecurity risk management. However, there is still uncertainty among directors, officers, and insurers about how to define a material incident. The insurance industry anticipates potential litigation and increased scrutiny of companies' cybersecurity practices as a result of these rules. The SEC aims to provide investors with timely and comparable information about cybersecurity risks, but the insurance industry sees challenges ahead. It is important for insureds and chief information security officers (CISOs) to work closely with brokers and advisors to understand their coverage and be prepared for potential incidents. [Extracted from the article]

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