Computer Fraud Archives : Page 2 of 2 : Fidelity Blog

Aqua Star: U.S. District Court applies “Authorized Entry” Exclusion to claim under Computer Fraud Coverage

On July 8, 2016, the U.S. District Court for the Western District of Washington released its decision in Aqua Star (USA) Corp. v. Travelers Casualty and Surety Company of America. The decision offers guidance to fidelity insurers with respect to the application of the “authorized entry” exclusion found in the base wording of many commercial crime policies (sometimes referred to as the “authorized access” exclusion), and illustrates how this exclusion may operate in the context of a social engineering fraud loss. The Facts The insured, Aqua Star (USA) Corp. (“Aqua Star”), is a seafood importer that had a pre-existing relationship with a

Pestmaster: U.S. District Court affirms Fidelity Insurer’s Intent on Scope of Computer Fraud and Funds Transfer Fraud Coverages

In Pestmaster Services, Inc. v. Travelers Casualty and Surety Company of America, the U.S. District Court for the Central District of California granted partial summary judgment in favour of Travelers on a claim advanced under its Computer Fraud and Funds Transfer Fraud coverages. The decision provides valuable guidance regarding the scope of these coverages. The Facts Pestmaster, a pest control business, was insured under a Travelers Wrap+ policy. In 2009, Pestmaster hired a payroll company, Priority, to handle its payroll and payroll tax obligations. Pestmaster executed an ACH authorization which authorized Priority to obtain payment of Priority’s approved invoices by