Does Your Insurance Cover Phishing Scam? It May Not.

Cybersecurity incidents are a popular topic of coverage in the press. These incidents range from hacking into government elections such as the 2016 U.S. presidential election, to that of hacking into the computers of power utility plants to potentially interfere with power outlets as what occurred in Vermont and in Ontario. Cybersecurity is a top of mind issue for most organizations. From a risk management standpoint, organizations often purchase insurance coverage to mitigate the impacts of a cybersecurity incident. That said, sometimes there is a disconnect between the type of coverage the buyer thinks it is getting and what the policy actually covers.

This was a particularly important focus in Apache Corp. v. Great American Insurance Company decision, where the U.S. Court of Appeals for the 5th Circuit adopted a narrow interpretation of a crime insurance policy, finding that it did not cover a loss resulting from a fraudulent email directing funds to be sent