Loss of Computer and Property Damage Definition

The insured brought a declaratory judgment action against the insurer seeking coverage for a lawsuit based on damage to a computer. This case is Eyeblaster, Inc. v. Federal Insurance Company, 2010 WL 2869547 (C.A. Minn.).

Eyeblaster is a worldwide online marketing campaign management company that advertisers and publishers use to run campaigns across the Internet; it delivers online marketing campaigns. Sefton alleges that his computer was infected with a spyware program from Eyeblaster and this caused his computer to immediately freeze up. He further alleges that he lost all data on a tax return, incurred many thousands of dollars of loss, and that his computer is no longer usable. When Sefton filed a lawsuit against Eyeblaster, the company turned the lawsuit over to its insurer, Federal Insurance. The insured had a general liability policy and an information and network technology errors or omissions policy. The insurer denied coverage under both policies and Eyeblaster filed a lawsuit seeking the coverage. The U.S. District Court for the District of Minnesota ruled in favor of the insurer and an appeal went to the Eighth Circuit.