Ernst & Haas Mgmt. Co. v. Hiscox, Inc.

(Insured Entitled to Coverage Under Crime Policy's "Computer Fraud" and "Funds Transfer Fraud" Provisions for Employee's Wiring of Funds in Response to Fraudulent Actor's Email Request)

(April 2022) - In Ernst & Haas Mgmt. Co. v. Hiscox, Inc. (9th Cir. Jan. 26, 2022, No. 20-56212) 2022 U.S. App. LEXIS 2372, the United States Court of Appeals for the Ninth Circuit reversed the district court's dismissal of insured property management company Ernst & Hass' coverage action seeking coverage under a Crime policy for a mistaken wire transfer caused by fraudulent impersonation of a managing broker. An accounts payable clerk for the insured who regularly disbursed funds according to protocol received an email purporting to be from her superior, a managing broker, directing her to make wire transfers. The sender was an imposter. However, the clerk, under the mistaken belief that the sender was her superior, effectuated two wire transfers totaling $200,000 before becoming