Analysis

Travelers' Win Deepens Divide Over Computer Fraud Coverage

Law360, Los Angeles (August 2, 2017, 10:17 PM EDT) -- A Michigan federal judge ruled Tuesday that Travelers doesn't have to cover a tool manufacturer's losses from an email-based theft scheme, giving insurers more ammunition to argue that computer fraud insurance doesn't apply to multistep scams and deepening a divide among the nation's courts on the scope of such policies.

The policyholder, American Tooling Center Inc., had been tricked into wiring funds to a phony bank account by thieves who used a process known as "spoofing" to send emails from an address that appeared to belong to a vendor. American Tooling's crime insurance policy with Travelers extended coverage to any "direct...

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