Checked Your Insurance Policies Lately?

In a ruling that might provide a new path to data breach insurance coverage, DSW Shoe Warehouse, Inc. has prevailed in its attempt to obtain insurance coverage for losses associated with a data breach under a commercial crime policy.

The Sixth Circuit Court Appeals, in Retail Ventures, Inc. et al. v. National Union Fire Ins. Co., ruled last week that DSW was entitled to more than $6.8 million in losses and prejudgment interest under a commercial crime policy in connection with a computer hacking scheme. The loss occurred between February 1 and February 14, 2005 when hackers used the local wireless network at a DSW store to obtain access to DSW's main computer system and download credit card and checking account information to more than $1.4 million customers in 108 stores. Upon learning of the breach, DSW commenced its own investigation and also notified its insurer of the claim. DSW sought coverage for expenses incurred relating to customer communications, public