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Court enforces $4.8M in insurance coverage for email scam

N.Y. judge rules the losses a company suffered when an imposter tricked its accounts payable department into wiring money are covered by computer fraud provisions in its insurance policy.

By Andrew Denney | Updated on July 27, 2017
Judge's decision comes at a time when courts around the country remain at odds over whether or not insurance claims should cover the types of attacks that befell Medidata, which are becoming more prevalent. (Photo: Bigstock)

The legal landscape for insurance coverage for business email scams remains unsettled, but a recent decision from a Manhattan judge ordering an insurer to cover $4.8 million in losses for a company that fell victim to a “spoofing” scam may give plaintiffs a new weapon in coverage disputes.

Southern District Judge Andrew Carter Jr. granted summary judgment for Medidata, which sued Federal Insurance Co., a subsidiary of insurance giant Chubb Ltd., saying the losses the company suffered when an imposter tricked its accounts payable department into wiring money are covered by computer fraud provisions in its insurance policy.

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