Bank, insurer fight over coverage for cyber attack

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A Virginia bank and its insurer were gathered at a federal court to determine coverage for a million dollar bill of attack.

The National Bank action of the Blacksburg / Everest National Insurance Company was held on June 28th in the US District Court in Roanoke, Virginia.

In the case in question, according to court records, whether the cyber attack would fall within the computer and electronic crime driver in the bank, which would result in a larger payout, or whether the bank card of the bank had a lower coverage limit.

“(Everest) says it is not a hack fraud, it’s an ATM or debit card fraud,” says Adam Ziffer, director of McKool Smith L.L.P. in New York, not included in the case. “It is not uncommon for insurance companies to at least get the most aggressive exposure-contraction position possible at the outset.”

Everest National Insurance Co., a subsidiary of Everest Re Group Ltd., filed an appeal to the federal court on July 20. Everest Re did not respond to comments.

Virginia-based bank Blacksburg said it was attacking twice in a short span of a year and suffered a total loss of $ 2.4 million. The first event took place in May 2016 and the second took place in January 2017. In a security review, he said that both attacks were decided to be handled by the same group of hackers in Russia using fraudulent e-mails.

The bank said Hackers could transfer more than $ 2 million as fraudsters to specific National Bank client accounts.

Court records claimed that the bank was covered by a computer and electronic crime driver with an insurance policy with Everest National, the only $ 8 million loss limit, and a bank card driver with a $ 125,000 credit card that could be lowered and losses. This results directly from the use of lost, stolen or altered bank cards or imitation cards.

The debit card driver has a single loss limit of $ 50,000, with a total limit of $ 250,000, down to $ 25,000.

The bank said in its complaint that “none of the losses would be caused by the theft of a National Bank customer from a bank card, or the bank card information being stolen without the knowledge or consent of a National Bank customer directly”.

“Despite the above facts, Everest says that the National Bank does not give Bond a guarantee for the losses mentioned in the evidence of claims under the C & E Crime Drivers; The bank claims that National Bank’s losses are below the Bond’s Debit Card Rider and lower coverage limits, “he said.

Everest National Insurance has determined that the “2016 Offensive and the 2017 Offensive are the sole events, and for this reason the total coverage of the National Bank’s Bond, based on the debit card, was $ 50,000 for both.”

New Jersey-based Everest National Freedom Monument confessed, “The National Bank has been exposed to attacks and attacks on a complex computer system,” but has rejected “Everest’s violation of the contract with the National Bank, malicious acts and denials. The National Bank has the right to suffer any damage from Everest. “

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