Recently a New York federal court judge ruled in favor of an insured in regard to a large cyber liability claim against the insured’s crime policy insurer. See Medidata Solutions, Inc. v. Federal Insurance Company, No. 1:15-cv-00907 (S.D.N.Y. July 21, 2017).
The facts in the case involved an employee being tricked by a thief using a fraudulent email into transferring approximately $4.8 million into a bank account in China. The insurer argued that the crime and computer fraud provision of the policy was not triggered because the thief did not actually hack into the insured’s computer system. The court disagreed with the insurer and found that the thief’s actions were, in fact, covered by the policy’s computer fraud provision, therefore providing coverage.
The full memorandum opinion can be found here