Policy holders alleging that computer fraud provisions of their insurance policies extended to fraud that stemmed from an intercepted email and a spoofing attack notched wins before two separate appellate courts recently. The first involves Travelers Casualty and Surety of America and American Tooling Center Inc., and the second involves Chubb Ltd. and Medidata Solutions Inc.
The 9th U.S. Circuit Court of Appeals affirmed the district court’s ruling in Aqua Star (USA) Corp., vs Travelers Casualty and Surety Company of America. The case involved fraudulent emails purporting to be from the insured’s suppliers directing that the insured direct its payments to a new account purportedly opened by that supplier. Based on that fraudulent communication, the insured transferred $713,890 due its supplier to the fraudulent “new account.”