Insurance Coverage Developments In 2018

Cyber Coverage for Social Engineering Schemes Remains at Odds

Social engineering continued to be a major concern in 2018 as businesses continued to fall prey to such schemes and other cyber risks. 2018 also saw a trend in favor of coverage for these schemes, which is promising for retailers and other businesses. However, the varied results continue and should caution policyholders to obtain social engineering/ impersonation cyber fraud coverage by endorsement that is as specific as possible.

• Am. Tooling Ctr., Inc. v. Travelers Cas. & Sur. Co. of Am., 895 F.3d 455 (6th Cir. 2018). The Sixth Circuit reversed a district court's decision finding coverage under a crime policy for a manufacturer's $800,000 loss, reasoning that the fraudulent email that prompted wire transfers to fraudsters was an immediate and proximate cause of the loss.