Finding Insurance Coverage for Data Breaches and Other Cyber Crimes

Very recently, we obtained for a policyholder-client an insurance recovery when the United States Court of Appeals for the Sixth Circuit rejected AIG’s denial of insurance coverage for the losses that resulted when the policyholder suffered a data breach at the hands of a computer hacker.

The Sixth Circuit’s decision underscores a couple of important insurance coverage points involving computer hacking claims: 1) policyholders should resist the routine insurance company claims handling tactic of applying unduly narrow interpretations of insuring clauses, including the “direct loss” clause to crime insurance and fidelity bond insurance policies; and 2) when a loss occurs, policyholders are well advised to consider whether more than one policy covers their losses.