Mondelez Deal With Zurich Adds Weight To NJ Court Decision

Law360 Insurance Authority

Mondelez International Inc.'s decision to settle a $100 million coverage dispute with Zurich American Insurance Co. over its losses from a 2017 cyberattack gives added weight to a New Jersey state court's ruling from earlier this year, a development that should play into policyholders' hands, legal experts say.

Late last month, on the day of closing arguments in a two-week trial, Mondelez and Zurich told an Illinois state court judge that they'd agreed to settle their dispute over the insurer's refusal to cover the snack food giant for losses it suffered from the 2017 NotPetya malware attack. The spat centered around whether Zurich could rely on an exclusion for "hostile and warlike action" to avoid covering Mondelez's losses from NotPetya, which the CIA and other Western agencies have attributed to hackers affiliated with the Russian military.

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"Right now, we have a favorable policyholder decision in the Merck case, and we have a case that Zurich was willing to take all the way through trial and was not confident enough in its own evidence to go to the jury," said Daniel Healy, a partner at Anderson Kill PC who is co-chair of the firm's cyber insurance recovery group. "I think it shows that Merck is the right decision, and it's even more important now."

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