An Axis Capital Holdings Ltd. entity was not required to compensate a silicon manufacturer for bank transfer theft of more than $ 1 million under its coverage for computer transfer fraud provisions, as company officials had approved the transfer, a federal appeals board said in confirming a lower court decision. .
In October 2017, the Chief Financial Officer of Burnside, Mississippi-based Mississippi Silicon Holdings LLC received an email from a regular provider requesting that future payments be routed to a new bank account, according to Thursday's ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Mississippi Silicon Holdings LLC v. Axis Insurance Co.
A letter about the same instructions, written on the seller's letterhead and signed by a seller, was attached to the email, the decision said. The body of the e-mail also contained previous e-mails between MSH's CFO and supplier staff regarding invoices and delivery details.
The official then approved two bank transfers to the seller's new bank account, totaling approximately $ 1
The company realized that it was a cyber fraud two months later, when the seller called to discuss outstanding payments – which MSH believed it already had
MSH then filed a claim for $ 1,025,881.13 according to the provisions of its commercial criminal insurance policy to Axis Holdings unit Axis Insurance Co.
Axis sent MSH a check for $ 100,000, the limit of its policy's social technology. fraud provision, but refused to pay for the claim under its policy transfer computer fraud, which has a limit of $ 1 million.
MSH brought an action against Axis in the US District Court in Amory, Mississippi, which ruled in favor of the insurer. This was confirmed by a unanimous panel of three judges.
"This dispute is about a disagreement over the interpretation of the policy provision on computer transfer fraud," the decision said.
“The policy means what it says: Coverage under the provisions on computer transfer fraud is only available when a computer-based fraud causes the transfer of funds without the insured's knowledge or consent.
“Here, three MSH employees confirmed the transfer in confirmation; it can therefore not be said that the fraud caused a transfer without the company's knowledge, "it said.
The agreement" simply limits coverage to cases where the transfer is made without knowledge or consent, "it said, with a confirmation
Lawyers in the case did not respond to a request for comment.
In December, a divided appellate court upheld a lower court decision and held a Liberty Mutual Insurance Group unit to replace a company cheated out more than 1.7 million dollars in a phishing incident under its commercial criminal insurance policy.
Catalog
Source link
