The first six months of 2022 saw policyholders notch a pair of huge-money wins in cyber coverage disputes Merck v. Ace American Insurance Co. and Target v. ACE Insurance Co. In an interview with Law360’s Insurance Authority, Partner Jacquelyn Mohr discussed the Target decision in which a Minnesota federal court reversed its earlier ruling finding that Target does have coverage for $138 million it paid to banks related to the costs of replacing store brand credit cards after a 2013 data breach.
Policyholder attorneys say the Target ruling is important in large part because it’s a high-profile instance of a court holding an insurance company to the plain meaning of its policy language, regardless of the insurer’s purported “intent” when it issued the policy.
Mohr expressed a similar sentiment, saying the Target ruling is an important example of a court “putting the onus on the insurance company to carve out anything they don’t want to cover.” “Insurance companies have the right to draft the policy however they see fit,” she said. “It’s their job to narrowly and explicitly identify everything they want excluded.”
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