These days most policyholders are entrusted with a wide-range of third-party data from health and personal information of their employees to financial and customer records. But often, when this data is stolen insurers are reluctant to pay for thee kind of losses. In the latest online-only column from Anderson Kill & Olick, Joshua Gold points out that according to many authorities, these losses should actually be covered.
In one recent case, for example, a policyholder was the victim of a computer hacker. The insurance company refused to pay the claim, but the court rejected the insurers attempts to evade payment and ruled that the policyholder was entitled to crime coverage for the theft of customer data.
Such a ruling is not only supported by the language of many crime policies (which often contain a provision indicating that they provide coverage for the theft of property not owned but in the possession of the policyholder), but also by numerous crime insurance coverage cases over the decades.