Insureds Seek Coverage For Breaches Under Traditional Policies

Ervin Cohen & Jessup LLP
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There have been a number of high-profile insurance coverage cases arising from losses due to cyber fraud – especially data breaches, "spoofing'' and payment instruction fraud. While cyber insurance is specifically designed to address these kinds of losses, insureds covered under traditional insurance products such as commercial general liability, errors and omission and crime poli­cies have continued to seek coverage under those policies for cyber-related losses.

For example, in a case filed on Nov. 15, Target seeks recovery for its cyber fraud-related losses from its general liability carrier Ace American Insurance Company. The case arose from Target's discovery in 2013 that a hacker had installed malware on its computer network which had allowed the hacker to gain access to customer payment cards and other personal data. According to Target's complaint, the data breach enabled the hacker "to steal payment card data and personal contact information for millions of Target customers, exposing those customers to the risk of fraudulent transactions on their payment cards."

Originally published in the Daily Journal - December 3, 2019.

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