Chegg Inc.

Company Overview

Business Model: Chegg, Inc. operates as a learning platform focused on empowering businesses to upskill their workforce and providing lifelong learners and students with essential skills and confidence. The company's long-term strategy involves evolving its platform to integrate academic support with practical, career-relevant skills, leveraging artificial intelligence (AI) for personalized and effective learning experiences. Its offerings are categorized into Chegg Skilling and Academic Services. Chegg Skilling includes a language learning platform offering self-paced lessons, live classes, and community practice in 14 languages, alongside workforce skilling programs that provide in-demand technical skills (e.g., AI, coding, data analytics, cybersecurity) and foundational business skills to employers. Academic Services, its legacy business, is headlined by Chegg Study Pack, a subscription bundle comprising AI-driven Chegg Study, Chegg Writing (plagiarism detection, grammar, citation tools), and Chegg Math (computational problem-solving). Chegg also generates revenue through programmatic advertising and content licensing.

Market Position: Chegg, Inc. operates in a rapidly evolving and competitive education industry, particularly with the increasing utilization of AI and machine learning. While the company states it does not have a single competitor across its entire business, it faces significant competition from specialized education and learning companies, as well as broader AI offerings from technology giants. The company believes it possesses competitive strengths across its business segments. However, recent technological shifts, such as Google's AI Overviews (AIO) search experience and the widespread adoption of free and paid generative AI services by students, have created headwinds, reducing website traffic and new subscriptions. The U.S. higher education market has also seen reduced undergraduate enrollment, with a decrease of approximately 2.8 million students since 2010, which negatively impacts Chegg's business.

Recent Strategic Developments: Chegg, Inc. is undergoing a significant business transformation, pivoting towards a skilling-focused business-to-business (B2B) organization. This strategy builds upon its existing professional language learning, workplace readiness, and AI-related skills courses. Key initiatives include:

• AI Integration: In April 2023, Chegg announced a partnership with OpenAI to integrate GPT-4 into its offerings, with the first phase of a new AI-powered user experience rolling out in September 2023.
• Strategic Review Conclusion: On October 27, 2025, the Board concluded its strategic review, affirming the company's evolution into a skilling-focused B2B model and restructuring its academic learning products.
• Workforce Restructuring: In May and October 2025, Chegg announced restructuring plans, including a reduction of approximately 640 employees (56% of its then-current global workforce) and the closure of its U.S. offices, to align its cost structure with industry challenges.
• Legal Action: On February 24, 2025, Chegg filed a federal antitrust and unjust enrichment complaint against Google LLC and Alphabet Inc. in response to Google's AIO search experience.

Geographic Footprint: As of December 31, 2025, Chegg, Inc. no longer maintains a corporate headquarters office in the U.S., supporting a globally-distributed workforce. The company leases corporate offices internationally in India, the United Kingdom, and Spain, with lease expirations ranging from 2026 to 2033. International customers contributed approximately 15% of total net revenues in 2025. Long-lived assets are primarily located in the United States ($106.9 million), followed by India ($12.9 million) and other international regions ($8.5 million).

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 59.6%
• Operating Margin: -31.0%
• Net Margin: -27.4%

Investment in Growth (2025):

• R&D Expenditure: $93,453 thousand (24.8% of revenue)
• Capital Expenditures: $28,123 thousand
• Strategic Investments: Chegg, Inc. continues to pursue acquisitions to add specialized employees, complementary businesses, products, services, operations, or technologies, with prior acquisitions including Busuu, Mathway, and Thinkful. In 2025, the company recorded a $6.0 million impairment charge on its equity investment in Knack Technologies, Inc.

Business Segment Analysis

Chegg Skilling

Financial Performance:

• Revenue: $68,654 thousand (-7.2% YoY)
• Operating Margin: Not explicitly disclosed.
• Key Growth Drivers: The decrease was primarily driven by a $8.9 million reduction in workforce skilling platform revenues, mainly from reduced direct-to-consumer transactions. This was partially offset by a $3.6 million increase in revenue from the language learning platform, primarily due to business-to-business growth. Chegg Skilling represented 18% of total net revenues in 2025, up from 12% in 2024.

Product Portfolio:

• Language Learning Platform: Offers comprehensive support through self-paced lessons, live classes with expert tutors, and a community for practice. Provides courses in 14 languages.
• Workforce Skilling Programs: Designed to help employers develop and retain talent by combining in-demand technical skills (e.g., AI, coding, data analytics, cybersecurity) with foundational business and human-centered durable skills. Programs feature engaging, modular online content, practice opportunities, and real-time learner progress tracking with predictive nudges.

Market Dynamics:

• Focused on the large and growing skilling market.
• Works closely with employers, including Fortune 1000 companies, to keep its portfolio current with emerging role requirements.
• Competitors for language learning include GoFluent, Speexx, and Duolingo.
• Competitors for workforce skilling include 2U, Inc., Simplilearn, General Assembly, Galvanize, Inc., Flatiron School, Codecademy, DataCamp, and Lambda, Inc.

Academic Services

Financial Performance:

• Revenue: $308,254 thousand (-43.2% YoY)
• Operating Margin: Not explicitly disclosed.
• Key Growth Drivers: The significant decrease was primarily due to a $223.8 million decline in subscription revenue, attributed to reduced traffic and fewer subscribers. Additionally, advertising services revenue decreased by $18.0 million due to lower fulfillment, and print textbook and eTextbook revenue decreased by $4.4 million as this platform is no longer provided. These declines were partially offset by $10.8 million in content licensing revenue. Academic Services constituted 82% of total net revenues in 2025, down from 88% in 2024.

Product Portfolio:

• Chegg Study Pack: A premium subscription bundle that includes Chegg Study, Chegg Writing, and Chegg Math.
• Chegg Study: Provides personalized, step-by-step learning support powered by AI, computational engines, and subject matter experts, delivered through a conversational experience.
• Chegg Writing: Offers plagiarism detection, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation.
• Chegg Math: Provides a computational engine to assist students in understanding and solving math problems.
• Also includes programmatic advertising across its platforms.

Market Dynamics:

• This segment is considered Chegg's legacy academic learning service.
• It has been negatively impacted by recent technological shifts, including Google's AI Overviews (AIO) and the increased adoption of free and paid generative AI products by students for academic support.
• Competitors for Chegg Study include Course Hero, Quizlet, Brainly, and Khan Academy.
• Competitors for Chegg Writing primarily include Grammarly.
• Competitors for Chegg Math include Photomath, Gauthmath, and Symbolab.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Chegg, Inc. did not conduct any cash repurchases of its common stock during the year ended December 31, 2025. In November 2024, the Board approved a $300.0 million increase to its existing securities repurchase program. As of December 31, 2025, $141.8 million remained available under this program. Subsequent to year-end, on February 13, 2026, Chegg repurchased $20.0 million in aggregate principal amount of its 2026 convertible senior notes for $19.4 million in cash, leaving $122.4 million available under the program.
• Dividend Payments: Chegg, Inc. does not intend to declare or pay any cash dividends in the foreseeable future.
• Dividend Yield: Not applicable.
• Future Capital Return Commitments: The securities repurchase program, with $122.4 million remaining as of February 20, 2026, has no expiration date and may be suspended, terminated, or modified at any time.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $31,146 thousand
• Total Debt: $53,765 thousand (Current portion of convertible senior notes, net)
• Net Cash Position: $(22,619) thousand
• Credit Rating: Not disclosed.
• Debt Maturity Profile: The 2026 convertible senior notes, with an outstanding principal amount of $53.9 million as of December 31, 2025, mature on September 1, 2026. Following a subsequent repurchase in February 2026, $33.9 million aggregate principal amount of the 2026 notes remain outstanding.

Cash Flow Generation (2025):

• Operating Cash Flow: $15,490 thousand
• Free Cash Flow: $(12,633) thousand (Operating Cash Flow of $15,490 thousand minus Capital Expenditures of $28,123 thousand)
• Cash Conversion Metrics: Not explicitly provided.

Operational Excellence

Production & Service Model: Chegg, Inc.'s learning platform is built on a technology core that leverages distributed systems, machine learning, data analytics, and generative AI to enhance efficiency and scalability. The company's AI capabilities, including computational engines, decision tools, and proprietary generative AI, are designed to create a personalized learning assistant, optimize learning experiences, and improve outcomes. This is powered by over a hundred million pieces of proprietary learning content. The platform utilizes shared infrastructure hosted by major cloud providers globally, featuring front-end applications, backend services, operational databases, and reporting subsystems, with industry-standard logging and monitoring for uptime.

Supply Chain Architecture: Key Suppliers & Partners:

• Cloud Hosting: Chegg, Inc. relies on Amazon Web Services (AWS) and other third-party software and service providers for critical systems, storage, and services, including user login authentication. The agreement with AWS can be terminated with 30 days' notice.
• Technology Partners: Chegg, Inc. has partnered with OpenAI to utilize GPT-4 in its offerings.

Facility Network:

• Manufacturing: Not applicable, as Chegg, Inc. provides digital learning services.
• Research & Development: While specific R&D facilities are not detailed, the company's product, engineering, and technical teams are responsible for maintaining the website, developing new products, and improving existing ones.
• Distribution: Not applicable, as services are delivered digitally.
• Corporate Offices: As of December 31, 2025, Chegg, Inc. no longer maintains a corporate headquarters in the U.S. It leases corporate offices internationally in India, the United Kingdom, and Spain. The Santa Clara and Portland offices in the U.S. were closed in 2025 as part of restructuring plans.

Operational Metrics: No specific operational metrics such as capacity utilization or efficiency measures were disclosed in the filing.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Chegg, Inc. employs a direct-to-consumer marketing strategy for its student-focused Academic Services, aiming to increase brand awareness and drive traffic to its website.
• Channel Partners: Not explicitly detailed, but the company's workforce skilling programs engage directly with employers.
• Digital Platforms: Relies on social media campaigns and mobile app stores (e.g., Google Play Store, Apple App Store) for student discovery and engagement. Its programmatic advertising technology is used to maximize the value of digital impressions.

Customer Portfolio: Enterprise Customers:

• Chegg, Inc.'s workforce skilling programs target employers, including Fortune 1000 companies, to develop and retain talent.
• Customer Concentration: No single customer or group of customers represented over 10% of net revenues during the years ended December 31, 2025, 2024, or 2023. Similarly, no customer accounted for over 10% of net accounts receivable as of December 31, 2025, and 2024.

Geographic Revenue Distribution (2025):

• United States: 85.0% of total revenue ($320,291 thousand)
• International: 15.0% of total revenue ($56,617 thousand)
• Growth Markets: International expansion is a strategic focus, despite a limited operating history in these jurisdictions.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The education industry is characterized by rapid evolution, particularly with advancements in AI and machine learning, leading to an increasingly competitive landscape. New AI technologies offer students immediate responses, creating disruption. The evolving educational landscape, including the impact of AI on study habits and assignment completion, introduces significant uncertainty in predicting operational trends. Furthermore, U.S. undergraduate college enrollment has declined by approximately 2.8 million since 2010, impacting the student market.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Language Learning Platforms: GoFluent, Speexx, Duolingo.
• Workforce Skilling Programs: 2U, Inc., Simplilearn, General Assembly, Galvanize, Inc., Flatiron School, Codecademy, DataCamp, and Lambda, Inc.
• Academic Study Materials/Instructional Systems: Course Hero, Quizlet, Brainly, Khan Academy.
• Citation/Grammar/Plagiarism Services: Grammarly.
• Equation Solver Services: Photomath, Gauthmath, Symbolab.

Emerging Competitive Threats:

• Broad AI Offerings: Companies such as Google, OpenAI, Microsoft, Meta, and Anthropic, whose general AI offerings may significantly impact education and learning.
• Google's AI Overviews (AIO): Google's expansion of AIO, which displays AI-generated content at the top of search results, is diverting user traffic away from Chegg's site.
• Educational Institutions: Certain institutions, like the University of Michigan, are developing their own AI tools that could compete with Chegg's offerings.
• Generative AI Products: Free and paid generative AI products (e.g., ChatGPT) are increasingly adopted by students as alternatives for academic support.

Competitive Response Strategy: Chegg, Inc. is responding by evolving its platform to leverage AI for personalized and effective learning, expanding its skilling offerings, and integrating them with core academic services. The company partnered with OpenAI for GPT-4 integration and has undertaken restructuring to optimize its cost structure. Furthermore, Chegg filed a federal antitrust complaint against Google LLC and Alphabet Inc. regarding the impact of AIO on its business.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: Failure to successfully execute the skilling-focused business-to-business strategy and realize anticipated benefits from business transformation and restructuring. Continued decline in revenue due to inability to attract and retain learners. Uncertainty in the evolving educational landscape, including the impact of AI on learning habits and demand for offerings. Reduced enrollment in U.S. colleges.
• Technology Disruption: Failure to innovate and offer new products and services in response to rapidly evolving technological developments, including AI. Increased competition from AI-driven products and technologies, including Google's AI Overviews (AIO) which diverts traffic.
• Customer Concentration: While no single customer accounts for over 10% of revenue, the business depends on a widely dispersed student population with high turnover and the willingness of business customers to invest in their workforce.

Operational & Execution Risks

• Supply Chain Vulnerabilities: Reliance on Amazon Web Services (AWS) and other third-party software and service providers for critical systems; any disruption or material change to these arrangements could adversely affect operations.
• Geographic Concentration: Limited operating history in international jurisdictions, and expansion efforts into these markets may not be successful, facing unique regulatory, cultural, and competitive challenges.
• Capacity Constraints: Not explicitly detailed, but the ability to scale high-performance technology infrastructure to handle increased usage is crucial.
• Internal Restructuring: Restructuring activities, including significant workforce reductions (approximately 56% in 2025) and office closures, could lead to business disruptions, loss of institutional knowledge, negative impact on employee morale and productivity, and may not achieve expected cost savings or benefits.
• Acquisition Strategy: Risks associated with integrating acquired companies, technologies, products, and personnel, including unforeseen expenditures, disruption to business, and failure to achieve market acceptance or profitability.
• Talent Retention: Dependence on the continued contributions of senior management and key employees, including the Chief Executive Officer and Executive Chairman, Dan Rosensweig. Intense competition for highly skilled personnel, and potential inability to attract or retain talent if equity compensation plans are not approved or sufficient.

Financial & Regulatory Risks

• Market & Financial Risks: History of cumulative net losses ($992.9 million as of December 31, 2025) and uncertainty regarding future profitability. Potential need for additional capital, which may not be available on favorable terms or at all. Significant cash requirements for servicing convertible senior notes, with potential inability to repay or settle conversions. The securities repurchase program could affect stock price volatility and diminish cash reserves.
• Regulatory & Compliance Risks: Exposure to evolving U.S. and foreign laws and regulations governing education, student information, data privacy (e.g., FERPA, COPPA, CCPA, GDPR, UK GDPR, PPL), advertising (CAN-SPAM, TCPA), and online transactions (ROSCA). Potential liability for internet content (e.g., copyright infringement, defamation) and challenges to DMCA safe harbor protections. Compliance with the FTC consent order regarding data security and privacy practices.
• Foreign Exchange: Exposure to fluctuations in foreign currency exchange rates (Indian Rupee, Euro, British Pound Sterling) impacting results of operations and cash flows.
• Credit & Liquidity: Significant decrease in cash, cash equivalents, and investments in 2025, primarily due to debt repayments.

Geopolitical & External Risks

• Geopolitical Exposure: Compliance with U.S. trade control laws (OFAC, BIS EAR) restricts operations in embargoed jurisdictions and with prohibited parties, potentially limiting growth prospects and imposing liability for non-compliance.
• Trade Relations: Escalation of sanctions or export controls could adversely affect business performance.
• Sanctions & Export Controls: Non-compliance with U.S. trade controls can result in significant fines, penalties, reputational harm, and loss of business.
• Natural Disasters/Public Health Crises: Operations are susceptible to earthquakes, floods, power losses, public health crises, and other natural or man-made disasters, which could adversely affect business and results of operations.

Innovation & Technology Leadership

Research & Development Focus: Chegg, Inc. places technology at the core of its learning platform, focusing R&D efforts on distributed systems, machine learning, data analytics, and generative AI. The company is building an industry-leading personalized learning assistant, leveraging computational engines, decision tools, and proprietary generative AI capabilities. It has developed large language models specific to academic subjects and use cases, optimizing the learning experience through its extensive proprietary data. R&D expenditure for 2025 was $93,453 thousand, representing 24.8% of total revenue.

Intellectual Property Portfolio: Chegg, Inc. relies on a combination of patent, copyright, trademark, and trade secret laws, along with contractual restrictions, to protect its technology and intellectual property. The company owns registered U.S. trademarks including Chegg, Chegg.com, Chegg Study, EasyBib, the Chegg “C” logo, and Busuu, and has pending trademark applications. It maintains content usage review systems, combining manual and automated blocks, to monitor for potentially infringing content on its platform.

Technology Partnerships: In April 2023, Chegg, Inc. announced a strategic partnership with OpenAI to integrate GPT-4 into its product offerings, signaling a pivot to AI-powered solutions.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: Chegg, Inc. depends on the continued contributions of its senior management and key personnel, including Dan Rosensweig. All executive officers and key employees are at-will. The company faces intense competition for skilled employees and its future success depends on its ability to identify, attract, and retain such talent.

Board Composition: The Board of Directors is classified into three classes with staggered three-year terms, and directors can only be removed for cause with the approval of at least two-thirds of outstanding common stock. The Board has the sole right to determine the number of directors and fill vacancies. The Audit Committee provides independent oversight of the company's Information Security Program.

Human Capital Strategy

Workforce Composition: As of December 31, 2025, Chegg, Inc. had a total of 595 employees, comprising 564 full-time and 31 part-time individuals. A significant portion of the workforce, 411 employees, is located outside the United States. The skill mix is not explicitly detailed, but the company relies on product, engineering, and technical teams for development and maintenance.

Talent Management: Acquisition & Retention: Chegg, Inc. prioritizes employee retention, growth, and development. In 2025, the company implemented a company-wide short-term retention cash bonus plan and a bonus plan for select vice presidents and above based on revenue and adjusted EBITDA goals. It also offers an "award-winning suite of benefits." However, in May and October 2025, Chegg announced restructuring plans that included a reduction of approximately 640 employees, representing about 56% of its then-current global workforce, to align its cost structure with industry challenges.

• Hiring Strategy: Not explicitly detailed beyond general competition for talent.
• Retention Metrics: Not explicitly detailed.
• Employee Value Proposition: Focuses on compensation, benefits, and culture to attract and retain employees.

Diversity & Development: A small portion of Chegg, Inc.'s international workforce, acquired through the Busuu acquisition in 2022, is covered under a collective bargaining agreement, while the majority is not. No specific diversity metrics or formal development programs were detailed in the filing.

Business Cyclicality & Seasonality

Demand Patterns: Chegg, Inc. is generally not subject to significant seasonal fluctuations. However, its Academic Services business is characterized by small transactions from a widely dispersed student population with an inherently high turnover rate due to factors like graduation. The student demographic exhibits rapidly changing tastes, preferences, behavior, brand loyalty, and price sensitivity. The willingness of business customers to invest in workforce skilling programs is influenced by general economic conditions.

Planning & Forecasting: The uncertainty surrounding the evolving educational landscape, particularly the impact of AI on learning and student study habits, makes it challenging to predict operational trends and results. Consequently, Chegg, Inc. may not be able to provide accurate annual financial guidance.

Regulatory Environment & Compliance

Regulatory Framework: Chegg, Inc. is subject to a complex and evolving landscape of U.S. and international laws and regulations impacting internet businesses and the education industry. These include:

• Industry-Specific Regulations: CAN-SPAM, FTC Act, TCPA, CARD Act, payment card industry data security standards, Title IV of the Higher Education Act, FERPA, COPPA, California's Privacy Rights for California Minors in the Digital World Act (Eraser Law), California Reader Privacy Act, California Education Code Section 99122, Digital Millennium Copyright Act (DMCA), and the Communications Decency Act.
• International Compliance: General Data Protection Regulation (GDPR) in the EU, UK General Data Protection Regulation (UK GDPR), Israel’s Protection of Privacy Law (PPL), the Skills and Post-16 Education Act 2022 in the UK (criminal offenses for academic cheating services), and the Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act) in Australia (offenses for academic cheating services).
• AI/ML Regulation: An evolving regulatory framework for machine learning, artificial intelligence, and automated decision-making (e.g., EU’s AI Act) could impose new obligations.
• Subscription Services: The FTC's "click-to-cancel" rule and similar state legislation (e.g., California, New York) are being considered or enacted, which could impact consumer cancellation options.

Trade & Export Controls: As a U.S. company, Chegg, Inc. must comply with U.S. economic sanctions laws (OFAC) and Export Administration Regulations (EAR) administered by the Department of Commerce, Bureau of Industry and Security (BIS). Non-compliance can result in significant fines, penalties, reputational harm, and loss of business. Escalation of sanctions or export controls could limit the company's ability to provide services in affected regions.

Legal Proceedings:

• Google Antitrust Suit: On February 24, 2025, Chegg, Inc. filed a complaint against Google LLC and Alphabet Inc. in the U.S. District Court for the District of Columbia, alleging federal antitrust and common-law unjust enrichment claims related to Google's AI Overviews search experience. Google moved to dismiss on July 25, 2025.
• JPMorgan Chase Bank, N.A. (JPMC) Demand: JPMC asserted a demand for repayment of investment proceeds from TAPD, Inc. ("Frank") due to alleged fraud by former Frank executives. Chegg, Inc. is pursuing resolution.
• Shareholder Derivative Complaints: Consolidated derivative complaints by Joseph Robinson and Rak Joon Choi, alleging securities law violations and breaches of fiduciary duties, were settled effective March 4, 2026, with Chegg, Inc. agreeing to governance changes and its insurance carrier covering Plaintiffs' counsel fees.
• Securities Fraud Class Action: A class action lawsuit by Steven Leventhal, alleging materially false and misleading statements, was settled for $55.0 million, with final court approval on May 21, 2025, and funds disbursed on November 18, 2025.
• FTC ROSCA CID: Chegg, Inc. settled an investigation with the FTC regarding compliance with the Federal Trade Commission Act and the Restore Online Shoppers’ Confidence Act (ROSCA), resulting in a $7.5 million monetary payment and injunctive provisions, with the order entered on September 18, 2025.
• As of December 31, 2025, the net impact of contingent liabilities less related insurance loss recovery is $7.0 million.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate (2025): -3.3%.
• Geographic Tax Planning: Chegg, Inc.'s earnings in India are not permanently reinvested. As of December 31, 2025, cumulative tax liabilities of $6.2 million would be incurred upon repatriation of these earnings. In 2025, $10.8 million was distributed from India to the United States, incurring $1.6 million in withholding tax. The net tax expense accrued for future repatriation is $1.1 million. The U.S. federal impact for repatriated funds from other foreign jurisdictions is anticipated to be minimal due to the Tax Cuts and Jobs Act.
• Tax Reform Impact: The company's effective tax rate may fluctuate due to new U.S. and worldwide tax laws and their interpretations.
• Net Operating Loss (NOL) Carryforwards (as of December 31, 2025): Approximately $243 million for federal (expiring starting 2030) and $288 million for state (expiring starting 2026). United Kingdom NOLs of approximately $144 million do not expire.
• Tax Credit Carryforwards (as of December 31, 2025): $13.6 million for federal (expiring starting 2038) and $18.1 million for state (do not expire).
• Valuation Allowance: The valuation allowance increased by $17.4 million in 2025, primarily due to the establishment of a valuation allowance against U.S. federal and state deferred tax assets in 2024, driven by cumulative losses and impairment expense.
• Unrecognized Tax Benefits: As of December 31, 2025, unrecognized tax benefits totaled $12.7 million, which would not affect the effective tax rate if recognized.

Insurance & Risk Transfer

Risk Management Framework: Chegg, Inc. maintains a directors’ and officers’ insurance policy to cover potential exposure up to the limits of its coverage. The company also has indemnification agreements with its directors, officers, and various vendors. However, there is no assurance that insurance coverage will be adequate or sufficient to protect against or mitigate liabilities arising from privacy and security practices, or that such coverage will remain available on commercially reasonable terms.