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Biggest Cyber Coverage Decisions of 2022

Law360 Insurance Authority

Cyber coverage litigation in 2022 focused on the application of policy language and underwriting to ever-evolving cyberthreats, from two highly anticipated war exclusion lawsuits to a cyberattack coverage fight that ended with a rescindment of the disputed policy.

Here, Law360's Insurance Authority breaks down the most important cyber coverage cases of 2022.


Insurers Notch Win In Splitting Computer Fraud, Social Engineering Coverage


The case also presents an interesting issue of "hybrid" attacks that combine elements of social engineering, or the deception or manipulation of human individuals in defrauding a policyholder, and hacking or computer fraud.

"SJ Computers shows how some insurers are interpreting computer fraud coverage very narrowly, even in circumstances where there may be a hacking event," said Jim Carter, a partner with Blank Rome LLP who represents policyholders.


Rescission Highlights Increasingly Meticulous Cyber Underwriting


Blank Rome's Carter said policyholders' objective with their efforts should be to avoid giving insurers any reason to rescind the policy. However, he also said that policyholders that find themselves in a rescission dispute should carefully review their responses, as insurers' allegations might not be well-founded.

"The insurer may contend that information in the application was inaccurate, but, in fact, the policyholder may have adequately responded to the question as written in the application; it's possible that the application could be ambiguous," Carter said.

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"Biggest Cyber Coverage Decisions of 2022," by Daniel Tay was published in Law360 Insurance Authority on January 2, 2023.