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Cybersecurity

Square Peg, Round Hole: 6th Circuit Affirms Finding That Cyber Claims Are Not Covered by CGL Policies

February 24, 2025 by David McConnell

In Home Depot Inc. v. Steadfast Insurance Co., Home Depot learned the hard way a rule every DIY enthusiast knows: measure twice, cut once. It appears Home Depot’s measurements were off when it sized up its insurance needs, and when its cyber coverage didn’t measure up to the costs of a data breach, the company tried to fit those cyber claims into its commercial general liability (CGL) policies. However, the Sixth Circuit ruled that those claims do not fit within the ... Keep Reading »

Ohio Supreme Court Finds Insured’s Ransomware Payment Not Covered Under Business Owners Policy

February 20, 2023 by Roben West

Syrian Hacker

In EMOI Services LLC v. Owners Insurance Co., No. 2021-1529 (Ohio Dec. 27, 2022), the Ohio Supreme Court found that there was no coverage for a ransomware attack because there was no direct physical loss as required under the business owners insurance policy, reinstating the trial court’s summary judgment ruling in favor of the insurer. The insured, a computer software company whose software provided certain administrative services for medical offices, was a victim of ... Keep Reading »

No Coverage Under Cybercrime Endorsement for Florida Fraudulent Wire Transfer

September 23, 2022 by Lauren Silk

image of hacker on computer

In Star Title Partners of Palm Harbor LLC v. Illinois Union Insurance Co., the Eleventh Circuit Court of Appeals affirmed judgment for the insurer and held that coverage did not exist under the plain language of a cybersecurity policy’s cybercrime endorsement for a Florida title company that was fraudulently induced to wire funds to the account of a fraudster impersonating a mortgage lender. In summer 2019, Star Title was hired by a homeowner to facilitate the sale of ... Keep Reading »

Federal Court Rejects Computer Fraud Coverage for Social Engineering Loss

August 31, 2022 by Amanda Proctor

In SJ Computers LLC v. Travelers Casualty and Surety Company of America, the U.S. District Court for the District of Minnesota recently addressed the scope of insurance available for a phishing scheme under the terms of a crime policy. The fact pattern leading to the insurance claim in SJ Computers is a familiar one: SJ Computers’ purchasing manager received fraudulent invoices from a bad actor purporting to be a legitimate vendor, ERI Direct. The invoices directed SJ ... Keep Reading »

Fifth Circuit Affirms Finding of No Coverage for Phished Funds Never “Held” by Insured

February 1, 2022 by Gregory Gidus

Credit Card Phishing Cybersecurity Hack

As we previously reported, in February 2021, a Texas federal court ruled that RealPage Inc. was not entitled to insurance coverage for funds diverted in an email phishing scheme because RealPage did not "hold" the diverted funds. The Fifth Circuit Court of Appeals has now weighed in, agreeing that RealPage never "held" the diverted funds as required by the policy and affirming the district court's decision. In 2018, a RealPage employee clicked on a phishing email ... Keep Reading »

Fifth Circuit Finds Coverage for Untimely Fraudulent Wire Instruction Claim Is Not Barred Under D&O Policy

October 13, 2021 by Benjamin Stearns

The Fifth Circuit Court of Appeals recently reversed a ruling that a directors and officers liability policy provided no coverage for an insured financial services firm that fell for a scam involving a fraudulent direction to wire $1 million from one of its customer’s accounts. After the customer threatened to file a negligence suit against the financial services firm, the firm submitted a claim for coverage under its D&O policy. The insurer declined to defend the ... Keep Reading »

Arizona Federal Court Finds False Pretenses Exclusion Bars Coverage for Fraudulent Wire Transfer Under Professional Liability Policy

September 28, 2021 by Amanda Proctor

In Helms v. Hanover Insurance Group Inc., the U.S. District Court for the District of Arizona weighed in on the issue whether a professional liability policy provided insurance for a fraudulent wire transfer. This decision is not the first to tackle this issue, and like the other opinions issued across the country, Helms demonstrates that the answer to this somewhat thorny question depends heavily on the specific policy wording at issue. The insured plaintiffs, a ... Keep Reading »

Ninth Circuit Finds Refusal to Accept a Demand, Without More, Is Not a “Claim” Under Policy

June 4, 2021 by Christina Gallo

Handing money over in an offering

On April 9, 2021, the Ninth Circuit Court of Appeals affirmed a lower court’s ruling that Starr Surplus Lines Insurance Co. need not provide coverage for Alorica Inc.’s loss from a 2018 phishing attack because the letter received from Alorica regarding the incident did not constitute a “claim” under Starr’s policy. The policy defined a “claim” as a “written demand for monetary or non-monetary relief.” Alorica contended that a letter from Express Scripts to Alorica, ... Keep Reading »

Beware the Honest Hacker: Indiana Supreme Court Finds That Bitcoin Payment Is Not Necessarily Covered Loss Under Commercial Crime Policy Because Not Every Ransomware Attack Involves Fraud

April 16, 2021 by J. Kent Crocker

Computer Hacker Cyber Attack

In G&G Oil Company of Indiana Inc. v. Continental Western Insurance Co., the Indiana Supreme Court considered the emerging area of computer crime coverage. G&G Oil was insured under a multi-peril commercial common insurance policy by Continental that provided commercial crime coverage. Specifically, the policy provided the following coverage provision: We will pay for loss or damage to "money," "securities" and "other property" resulting directly from the use ... Keep Reading »

Texas Federal Court Finds No Coverage Under Crime Policy for Phishing Scheme Because Insured Did Not “Hold” Diverted Funds and Suffered No Direct Loss

March 19, 2021 by Gregory Gidus

RealPage was the victim of a phishing scheme that resulted in the diversion of its client funds from the bank account of a third-party payment processer, Stripe Inc. In the ensuing insurance coverage litigation styled RealPage Inc. v. National Union Fire Insurance Company of Pittsburgh, the court ultimately concluded that RealPage was not entitled to coverage for its loss because RealPage did not “hold” the diverted funds and because RealPage did not suffer a direct loss ... Keep Reading »

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