In an interesting case from Indiana, a court recently ruled that language in the insurer’s “quotes” for coverage in a crime policy led the insured to believe that losses for computer hacking would be covered under the policy if the insured purchased coverage. The case, Metal Pro Roofing, LLC v. Cincinnati Insurance Company, 2019 WL 3756738, found that the quotes provided to the insured stated:
Business owners typically think of your buildings, inventory, furniture, office equipment, automobiles and mobile equipment when designing an insurance program to protect your assets. Ironically, you would be overlooking what is arguably one of your most valuable assets – your money and securities.
Cincinnati can insure your money and securities while at your premises, inside your bank and even off site in the custody of a courier. While you’ve taken precautions to protect your money and securities, you run the risk of loss from employees, robbers, burglars, computer hackers and even physical perils such as fire.
Give yourself peace of mind with Cincinnati’s crime coverage to insure the money and securities you worked so hard to earn. (emphasis added).
The two roofing company plaintiffs sustained losses of more than $78,000 after their bank accounts were hacked and money taken out of their accounts. The plaintiffs submitted claims under their insurance policies, but the claims were denied when the insurer found that computer hacking was not covered by the policies.
It was clear that the language in the quote was not a policy. Nevertheless, the court still overturned the summary judgment for the insurer as the evidence indicated that the insured relied on the description in the quotes when deciding to purchase the coverage. The case was remanded to the lower court for trial.
While this case may be a bit of an outlier in terms of the facts, it illustrates an important point–always confirm that the cyber and/or crime coverage in your insurance policy(ies) matches your business needs and associated risks. In considering the facts of this case, it’s wise to review the policy to make sure you have the coverage you think you purchased.