US Courts Offer Differing Interpretations of Cyberfraud Cases

June 1, 2022 | Privacy, Data & Cyber Law

A prominent court recently addressed whether commercial crime insurance covers cyberfraud. The decision illustrates courts’ confusion in this area. When it comes to cyberfraud, courts continue to give different answers to the same questions.

As I’ve previously written, the questions are easily remembered with the acronym “ACAI.”

Act: Is the “act” covered?

Causation: Were the act and injury linked by the “causation” that the policy required?

Authorization: Did the policyholder “authorize” the act in a way that bars coverage?

Injury: Did the claim involve a covered “injury”?

The decision was from the U.S. Court of Appeals for the 9th CircuitErnst & Haas Management Co. v. Hiscox Inc., No. 20-56212 (Jan. 26, 2022), and addressed two provisions in commercial crime policies: computer fraud and funds transfer fraud.

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This article appeared in the June 2022 issue of Best’s Review®.

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