The United States Court of Appeals for the Eleventh Circuit issued an important computer fraud insurance decision on Thursday, May 10, delivering a significant partial victory for policyholders that operate public-facing interactive voice response (“IVR”) computer systems. The Eleventh Circuit’s decision in Interactive Communications International, Inc. v. Great American Insurance Co.,(“InComm”) may benefit policyholders considerably because it holds that a third party’s use of a telephone to manipulate an IVR system constitutes the “use” of a “computer”—which is an element required to trigger coverage under many computer fraud policies.

At the same time, however, the court in InComm held that coverage was unavailable because, under the specific facts of this case, the policyholder’s loss did not result “directly” from the use of the computer, as required by the policy.