No Coverage For Fraudulent Withdrawal Of Electronic Funds
Court finds all-risk insurance policy with cyber risk exclusions does not cover hacker’s fraudulent withdrawals from insured’s bank account.
December 04, 2013
Law360, New York (December 04, 2013, 11:39 PM ET) ‐‐ On Nov. 21, 2013, District Court Judge Orinda Evans ruled that an all-risk insurance policy did not provide coverage to a real estate brokerage company for online fraudulent withdrawals from the company’s bank account. Metro Brokers Inc. v. Transportation Insurance Co., No. 1:12-CV-3010-ODE (N.D. Ga. Nov. 21, 2013). The evidence suggested that a hacker obtained Metro’s online banking log-in credentials through a key logger "Zeus" virus that was found on several of Metro’s computers. The court gave effect to two exclusions concerning cyber risks and recognized that specialty coverage is available to policyholders. The court’s decision is an important one for insurers who exclude or provide first-party or liability cyber coverage and for policyholders who may make a claim for cyber losses.
© All Content Copyright 2003-2013, Portfolio Media, Inc. Posted with permission.
The articles on our website include some of the publications and papers authored by our attorneys, both before and after they joined our firm. The content of these articles should not be taken as legal advice. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views or official position of Robins Kaplan LLP.
If you are interested in having us represent you, you should call us so we can determine whether the matter is one for which we are willing or able to accept professional responsibility. We will not make this determination by e-mail communication. The telephone numbers and addresses for our offices are listed on this page. We reserve the right to decline any representation. We may be required to decline representation if it would create a conflict of interest with our other clients.
By accepting these terms, you are confirming that you have read and understood this important notice.