2 Circuit Court Rulings Rock Phishing Loss Coverage Field

By J. Robert MacAneney, John Pitblado and Amanda Proctor (July 26, 2018, 3:10 PM EDT) -- On July 6, the Second Circuit Court of Appeals set off some fireworks[1] in the insurance coverage litigation field when it found coverage for a "social engineering" / phishing scheme loss, bucking the trend among its sister courts. The appellate court affirmed a Southern District of New York decision that had been a relative outlier, finding coverage under a crime/fidelity policy for a scheme where fraudsters used spoof emails to trick company employees into changing wiring instructions. The scheme resulted in a $5.8 million loss for the plaintiff policyholder, Medidata Solutions Inc....

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