A recent coverage dispute involving a Nevada club’s losses resulting from its employees’ theft from the club’s customers’ credit cards raises interesting issues with implications for coverage questions for other kinds of losses for which policyholders are seeking crime policy coverage. In the recent Nevada club credit card fraud case, District of Nevada Judge Andrew Gordon held that the club’s crime policy did not cover the club’s losses from the employees’ theft of funds from the customers’ credit card accounts because the losses did not result directly from the employees’ theft. Judge Gordon’s August 6, 2018 opinion can be found here. An August 7, 2018 post on the Wiley Rein law firm’s Executive Summary Blog about Judge Gordon’s opinion can be found here.
Continue Reading Crime Policy Doesn’t Cover Employee Credit Card Overcharge Losses
Second Circuit: Computer Fraud Coverage Section Covers Fraudulent Email Funds Transfer
In a much anticipated decision, on July 6, 2018 the Second Circuit, applying New York law, affirmed a district court ruling that the computer fraud provisions of a commercial crime coverage section covered the losses Medidata incurred when the company’s employees transferred funds in response to a spoofed email. The appellate court’s opinion could prove valuable for other policyholders seeking to establish that their crime policies provide coverage for losses incurred as a result of social engineering fraud (also known as payment instruction fraud). The Second Circuit’s July 6, 2018 opinion can be found here.
Continue Reading Second Circuit: Computer Fraud Coverage Section Covers Fraudulent Email Funds Transfer