Costs are expenses incurred in investigating, defending, or settling claims, typically requiring the insurer's prior written consent. These generally include legal fees, expert costs, and investigation expenses, but exclude the insured's internal overheads, salaries, or business expenses. Examples include costs to investigate a data breach or defend a privacy claim. Policies specify whether costs are paid "within" the limit of liability (eroding available coverage) or "in addition to" it (preserving the full limit for indemnity payments), which significantly affects the economic value of coverage.
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