"It's not the electronic data that's being lost here, it's actually the card," policyholder attorney Joshua Gold of Anderson Kill PC said., "And I think the court's correlation between the card and the new electronic data residing on a computer system … is a step too far for the court."
The court's initial determinations over whether there was a loss of use and what constitutes an occurrence were in keeping with a prior court's ruling in a similar loss of card use case, Target Corporation v. ACE American Insurance Company et al., Gold offered.
However, when it comes to the electronic data exclusion prevailing over general liability coverage, the exclusion could have been "severed" into multiple components, he said. The actual cost of the cards that were lost could have been separated from the electronic information, offering a more "sophisticated" breakdown of what the policyholders' damages were.
The cards "have an actual economic cost you attach, the cost of that card having been printed up and embossed with the numbers and everything else that is very much a physical attribute of the card, the court could have said that is a covered loss of use," Gold said.
Looking ahead, Gold also offered direct advice for policyholders in the aftermath of the court's decision.
"It is not uncommon these days, sadly, from the policyholder perspective to see lots of cyber-related exclusions now baked into CGL policies," Gold said.
"If you're a policyholder and you're looking at these issues, yes, absolutely try and fight the inclusion of these kinds of electronic or cyber-related exclusions into really all of your policy, whether it's CGL or crime or property insurance or D&O insurance, very important to resist that," he advised.
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