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The Supreme Court of Justice returns the ransomware case for review



The Supreme Court of Indiana unanimously ruled on Thursday that neither a WR Berkley Co. unit nor an oil company has the right to summarize the judgment in a dispute over coverage of a ransomware incident, and sent the case to the lower court for further negotiation. [19659002] However, a policyholder's lawyer says the decision in G&G Oil Co. in Indiana, Inc. v Continental Western Insurance Co. is a positive development for the insured.

The Court's ruling, which overturned two lower court decisions in Berkley's favor, states that the question is whether a computer was used to "fraudulently cause a transfer", as required by the Commercial Crime Act. in the oil company's policy.

In November 201

7, Muncie, Indiana-based G&G Oil discovered that it was locked out of its computer systems in a ransomware attack, but was able to restore its operations after paying nearly $ 35,000 in bitcoins, according to the ruling.

The Berkley unit Continental Western denied its claim for coverage and G&G Oil brought an action against the insurer. The trial court ruled in Berkley's favor on the grounds that the loss was not "fraudulently caused" but was the result of theft.

The decision was upheld by a state appellate court, which ruled that the hacker did not engage in the business of buying bitcoin.

The term "" fraudulent cause of a transfer "can reasonably be understood as simply" obtaining by trick, "the decision said, referring to a previous case. "We cannot say with confidence that G&G Oil has provided reliable evidence to justify a summary assessment," it said. For example, if no safeguards were put in place, it is possible for a hacker to enter the company's servers unhindered and hold them hostage. There would be no trick there. G & G & # 39 ;s Oils belief in a spearfishing campaign does not entitle it to a summary judgment.

"Nor is a summary judgment appropriate for Continental," the decision states. "We believe – as above – there is a question as to whether G & G Oil's computer system was obtained by trick.

" Although little is known about the initial occurrence of the hack, it is known enough to give a reasonable conclusion that the system could have been reached by trick, ”it said when he asserted the goal of further negotiations.

Scott Godes, a partner with Barnes & Thornburg LLP in Washington, who filed an amicus card on behalf of United Policyholders, an insurance consumer advocate organization that supports the gas company, said he was hopeful the court would rule the company. "This (crucial) has given the policyholder a clear shot for coverage," he said.

"This is a good decision for policyholders," in an issue that has not seen much judicial authority, he said. "It's nice to see the court recognize that criminal insurance can cover losses in ransomware."

Other lawyers in the case did not respond to a request for comment.

Much of the increased damage rate and severity of cyberbullying, which is expected to lead to 20% to 50% interest rate increases this year, is driven by ransomware, according to a report released earlier this month.

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