The Expert Podcast

This is a big time case that has a lot of implications for the cyber liability insurance market. And whether you're an insurer, an agent a broker or even a company with cyber insurance, this case really has a lot to do with your future coverage. This case comes out of. A dispute over whether a coverage applies in a certain malware cybersecurity issue. What happened is, Mondelez which is a. A major company. Had a. attack and a cause 10 billion in damages globally. And on other computer networks besides its own. The insurance provider claimed that an act of war exemption…Mitigated. The claim meaning that there's an exclusion. In cyber insurance policies for an act of war, they don't cover cyber attacks that have to do with an act of war So the insurance company said look, this. Particular attack came from Russian military hackers. And it was against Ukraine and that is spread around the world and got into Mondelez. computers. Well, It was denied. The claim was denied Well the company took the case. To court. And they claim that. It was not…an exclusion under their policy. But they were collateral damage. In a much larger cyber conflict that had nothing. do with them. And they settled So they basically won. Last week's ruling. Makes the insurance companies have to rethink what act of war means Current definitions come out of the 19th century, where we had pirates navies and privateers. So you're going to find that in any kind of coverage not just cyber coverage, there are often exclusions on a policy for acts of war. And it's a broad coverall type exclusion. Well, And insurance company can. Claim that. A particular hack or. ransomware or some other type of cyber attack. Have to do with a war action and it could be broadly construed based on you know the fact that if the hackers were part of a military that could be an act of war. Even though this ruling may not be binding as a precedent. It's certainly an indication of how judges and juries might view. The insurance company's perception of what is an act of war look it may not. Result in insurance companies stopping. Trying to make this exclusion other cases, but at least. They will shift the strategy to writing exclusions. And maybe changing it to warlike acts instead of acts of war. The main thing to keep in mind is that. There is a lot of overlap between. Military action. wars, conflicts and cyber attacks. And if your policy has that exclusion. You want to make sure that your coverage matches what you're expecting from your insurance company? Either way, this ruling starts to define some of the boundaries of what is an act of war on cyber insurance and what is still covered under the policy language.