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laptop exclusion

A laptop exclusion is one found in cyber and privacy insurance policies that excludes coverage for both first-party property and third-party liability claims caused by lost or stolen laptop and notebook computers.

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Some versions of this exclusion are even broader and preclude coverage for losses involving other types of portable electronic devices such as iPhones, iPads, tablets, and flash drives. The rationale for the laptop exclusion is that portable electronic devices are especially vulnerable to being lost, stolen, misplaced, or damaged. In addition, insurers believe that the more portable an electronic device is, the less control an insured business will have in safeguarding both the device itself and, more importantly, the data it contains. Some insurers will agree to remove this exclusion in exchange for additional premium. Favorable versions of this exclusion (for insureds) are those that "except" and thus cover losses involving portable computing devices or portable media containing electronic data if the data is encrypted. As a consequence of such wording, coverage applies to a loss involving a portable device on which data has been encrypted.