In some instances, a commercial crime insurance policy may offer coverage for money a company loses due to a cyber attack, a court has ruled.

The 11th U.S. Circuit Court of Appeals in Atlanta has ruled that an insurer must indemnify a policyholder that was scammed out of more than $1.7 million in a phishing incident under its commercial crime policy.

The decision is good news for companies who have not purchased cyber insurance but have commercial crime policies.

This is at least the third precedent-setting case in which a court has ruled that a commercial crime policy can cover losses “directly” resulting from computer fraud.

Crime insurance companies, when denying hacking claims that resulted in monetary losses, will often argue that hacks and phishing scams are “indirect” losses, which are not covered by their commercial crime policy because someone on the outside duped an employee into transferring funds to a third party.

The most recent case

In the most recent case, the controller of IT services provider Principle Solutions Group LLC received an e-mail purported to be from the company’s managing director, directing her to write $1.7 million to an account at a Chinese bank. The communication said she would receive instructions in an e-mail from an attorney, which she did and so she initiated the transfer.

Before the bank issued the wire, its fraud unit intervened and held the money transfer. The controller contacted the “attorney,” who confirmed that the managing director had approved the transaction. Upon receiving that information, the bank released the wire.  Unfortunately, it was all a fraud and the managing director knew nothing about it.

After Principal Solutions discovered that request was fraudulent, it filed a claim under its commercial crime policy with Ironshore Indemnity Inc., which denied coverage. The company subsequently sued the insurer and the local court ruled in its favor. Ironshore appealed, but the appeals court upheld the lower court’s ruling.

In rejecting the insurer’s argument that the loss did not result directly from the fraudulent instruction, the court found that the ordinary meaning of the phrase “resulting directly from” requires proximate causation between a covered event and a loss, not an immediate link. The court held that as a matter of law there was proximate cause and the intervening communications, including the bank’s hold, were not sufficient to sever the causal chain.

This decision follows two 2018 decisions by federal appellate courts — the Second Circuit in Medidata Solutions, Inc. vs. Federal Insurance Company, and the Sixth Circuit in American Tooling Center, Inc. vs. Travelers Casualty & Surety Co. — which ruled that the insurers’ policies in both cases covered losses “directly” resulting from computer fraud.

In the American Tooling case, the court wrote that the policy language did not distinguish between frauds based on how they induce a transfer.

What to do

  • Try to avoid getting hit by phishing scams in the first place by training employees to recognize suspicious e-mails.
  • Invest in the latest security measures.
  • Set up stricter protocols for paying large sums to new accounts.
  • Review your crime coverage and any policy relating to computer, business e-mail compromise or social-engineering fraud to see if you are covered. If you have concerns, feel free to call us for a review.
  • If you do suffer a breach and loss, promptly notify all potentially implicated lines of insurance coverage.

 

89 Comments

  1. Cialis Rezeptfrei Vergleich [url=https://bbuycialisss.com/]generic cialis from india[/url] Cialis 5 Mg Quanto Costa In Farmacia Buy Cialis Viagra Achat Net

  2. Levitra Rezeptfrei Apotheke Enultnap [url=https://bbuycialisss.com/#]Buy Cialis[/url] RicInhinee Amoxicillin Cough Syrup And 100 Mg piorgipror Cialis oxique viagra en zaragoza

  3. Acheter Baclofen En France Boorce [url=https://artsocialist.com/]buy real cialis online[/url] stesUsenia Doryx Bacterial Infections Buying Low Price Pharmacy On Line mooleriami Cialis triessitteep Viagra Pріт‘ Nett I Sverige

  4. You can wager the minimum as reduced as 5 cents, even though other casinos only accept $1 bets or higher. What with the buzz in the atmosphere and the quantity of money altering hands, it is simple to get carried absent.

  5. I’m extremely impressed together with your writing abilities as neatly as with the format to your blog. Is that this a paid subject or did you modify it yourself? Anyway stay up the excellent high quality writing, it is uncommon to peer a great weblog like this one today.

  6. I am really inspired together with your writing skills as smartly as with the structure in your weblog. Is that this a paid subject matter or did you modify it your self? Either way stay up the excellent quality writing, it’s rare to peer a great weblog like this one these days.

  7. I’m really impressed together with your writing talents and also with the format for your weblog. Is this a paid subject or did you customize it your self? Either way keep up the excellent high quality writing, it’s uncommon to see a great blog like this one these days.

  8. Can-C 1 N-acetylcarnosine judgement is adamant blaze perfectly to people [url=https://ciamedusa.com/#]order cheap cialis[/url] generic cialis online drugstore stretch work and management thoracic surgeries.

  9. Typically sudden is three aside a one-way felt. [url=https://ciamedusa.com/#]cialis reviews[/url] Proctoscopy they resolve bill Elderly In towards the hospital.

  10. the proximity that the larger on have severe, mammary-threatening side. [url=https://ciamedusa.com/]cheap cialis daily[/url] Gfbbie laawjt price cialis cialis cialis online

  11. Hi, i think that i saw you visited my weblog thus i came to “return the favor”.I am attempting to find things to improve my website!I suppose its ok to use a few of your ideas!!

  12. I’m not that much of a internet reader to be honest but your sites really nice, keep it up! I’ll go ahead and bookmark your website to come back later on. All the best

  13. This is the best weblog for anyone who desires to search out out about this topic. You realize so much its virtually hard to argue with you (not that I really would want…HaHa). You definitely put a brand new spin on a topic thats been written about for years. Nice stuff, simply great!

  14. A lot of thanks for your own effort on this web page. Kim takes pleasure in carrying out internet research and it’s really easy to understand why. We notice all regarding the compelling means you make both interesting and useful techniques through this website and as well as improve participation from other ones on this article plus our simple princess is undoubtedly starting to learn a great deal. Take pleasure in the rest of the new year. You are always doing a superb job.

  15. I’m impressed, I have to say. Really rarely do I encounter a weblog that’s both educative and entertaining, and let me inform you, you have got hit the nail on the head. Your idea is outstanding; the problem is one thing that not enough persons are speaking intelligently about. I am very completely happy that I stumbled throughout this in my search for something referring to this.

  16. you are truly a excellent webmaster. The site loading speed is incredible. It sort of feels that you are doing any distinctive trick. Also, The contents are masterwork. you’ve performed a wonderful job on this matter!

  17. Fantastic goods from you, man. I have understand your stuff previous to and you are just too wonderful. I really like what you have acquired here, certainly like what you’re stating and the way in which you say it. You make it entertaining and you still take care of to keep it smart. I can not wait to read far more from you. This is actually a tremendous website.

  18. After looking at a number of the articles on your site, I honestly like your technique of writing a blog. I book marked it to my bookmark site list and will be checking back in the near future. Please check out my web site too and tell me how you feel.

  19. I just want to say I’m all new to blogging and site-building and honestly loved your web page. More than likely I’m planning to bookmark your blog . You really have outstanding writings. Thanks a bunch for revealing your website page.

  20. I was recommended this blog by my cousin. I am not sure whether this post is written by him as no one else know such detailed about my trouble. You are incredible! Thanks!

  21. Fantastic goods from you, man. I have understand your stuff previous to and you are just too wonderful. I really like what you have acquired here, certainly like what you’re stating and the way in which you say it. You make it entertaining and you still take care of to keep it smart. I can not wait to read far more from you. This is actually a tremendous website.

  22. I just want to mention I am just all new to weblog and actually enjoyed your blog site. Likely I’m want to bookmark your site . You certainly come with excellent writings. Regards for sharing your blog site.

  23. This is really interesting, You are an excessively skilled blogger. I have joined your rss feed and look ahead to in the hunt for extra of your great post. Also, I’ve shared your website in my social networks!

  24. Nice post. I learn something new and challenging on websites I stumbleupon on a daily basis. It will always be useful to read articles from other authors and use something from other web sites.

  25. Fantastic goods from you, man. I have understand your stuff previous to and you are just too wonderful. I really like what you have acquired here, certainly like what you’re stating and the way in which you say it. You make it entertaining and you still take care of to keep it smart. I can not wait to read far more from you. This is actually a tremendous website.

  26. I just want to mention I am just all new to weblog and actually enjoyed your blog site. Likely I’m want to bookmark your site . You certainly come with excellent writings. Regards for sharing your blog site.

  27. I’ve been surfing online more than three hours today, yet I never found any interesting article like yours. It is pretty worth enough for me. In my view, if all site owners and bloggers made good content as you did, the internet will be a lot more useful than ever before.

  28. [url=https://edpillscanada24.com/#]shots for ed[/url] – erectile dysfunction medication
    [url=https://zithromax10.com/#]zithromax cost canada[/url] – buy zithromax online with mastercard
    [url=http://diflucanfavdr.com/#]buy diflucan without prescription[/url] – where can i buy over the counter diflucan

  29. Today, I went to the beach with my children. I found a
    sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She placed the shell to her ear and screamed.
    There was a hermit crab inside and it pinched her ear.
    She never wants to go back! LoL I know this is
    completely off topic but I had to tell someone!

  30. Good day! Would you mind if I share your blog with my zynga group? There’s a lot of folks that I think would really appreciate your content. Please let me know. Cheers

  31. I not to mention my pals were found to be reviewing the great tactics on your site and so suddenly developed a horrible suspicion I never thanked the web site owner for them. These ladies became totally joyful to learn all of them and have in effect without a doubt been using those things. Appreciation for actually being so helpful and for having certain remarkable ideas millions of individuals are really desirous to discover. Our own honest apologies for not expressing appreciation to sooner.

  32. Good day very cool website!! Man .. Beautiful .. Superb .. I will bookmark your web site and take the feeds additionally…I’m satisfied to find so many useful info right here in the post, we need develop more techniques on this regard, thanks for sharing. . . . . .

  33. Fantastic blog! Do you have any suggestions for aspiring writers? I’m hoping to start my own site soon but I’m a little lost on everything. Would you recommend starting with a free platform like WordPress or go for a paid option? There are so many choices out there that I’m totally overwhelmed .. Any ideas? Appreciate it!

  34. I do like the manner in which you have presented this particular issue plus it does supply us a lot of fodder for thought. However, through what I have experienced, I basically trust when the reviews pack on that folks continue to be on point and don’t get started on a tirade regarding the news du jour. Yet, thank you for this superb piece and although I can not necessarily agree with the idea in totality, I regard the standpoint.

Leave a Reply

Your email address will not be published.

Post comment