The first six months of 2022 saw policyholders notch a pair of huge-money wins in cyber coverage disputes, directors and officers insurers do uncharacteristically well in corporate-friendly Delaware and the Ninth Circuit joins other appellate courts in finding coverage for social engineering wire fraud.
Here, Law360's Insurance Authority breaks down the most important specialty lines rulings so far this year.
Merck's $1.4 Billion Win Ignites Cyberwar Coverage Debate.
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"An act of war is a very specific thing," said Daniel J. Healy, an insurance recovery partner at Anderson Kill. "What we're seeing [currently] in terms of cyberattack is not the type of activity that falls within this exclusion."
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Joshua Gold, an insurance recovery shareholder at Anderson Kill, said that if underwriters do look to alter policy language to exclude cyberwar coverage in the wake of Merck as widely expected, it could lead to friction between policyholders and insurers.
"Policyholders are going to weigh whether or not they want to do business with those insurance companies," Gold said. "I think that conversation is going on right now, even with regard to cyber-dedicated insurance."
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"In a future case where the parties do not ascribe the same meaning to the word 'for,' I think there's a very good argument that there should be coverage for an appraisal action," said Raymond A. Mascia Jr., a shareholder at Anderson Kill who represents insurers.
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