In a closely-watched case on insurance coverage in an age of expanding cyber risk, in Medidata Solutions Inc. v. Federal Insurance Company, a federal appeals court in New York has upheld a lower court ruling a commercial crime insurance policy covers wire transfer losses resulting from a spoofing attack.
The ruling is a reminder of how traditional wording in policies continues to be closely scrutinized by insureds for any ties to cyber risk, insurance experts.
According to Joshua Gold, chair of the cyber insurance recovery practice at Anderson Kill and amicus counsel to the consumer group United Policyholders in the Medidata appeal, the court, "rejected arguments that undermine the rationale" for computer fraud insurance coverage.
"This is a reminder that when money, securities or property are stolen by a cyber criminal, policyholders are well advised to consider insurance coverage under more than just dedicated specialty cyber policies and property policies. Crime insurance may be available to cover these types of cyber losses.”
Read More: Impact of Court Ruling Chubb Unit's Crime Policy Covers 'Spoofed' Wire Transfer