Merck Settles Coverage Dispute With Insurers Over War Exclusion in NotPetya Attack
pMerck Co Inc has reportedly reached a deal with insurers over a closelywatched coverage dispute related to a massive cyberattack in 2017ppThe New Jersey Supreme Court in July 2023 agreed to hear the case after a state appeals court ruled months prior against eight insurers finding that a hostilewarlike action exclusion in an all risks property insurance policy did not apply to a Russianlinked cyberattack known as NotPetya on the pharmaceutical firmppRelated New Jersey Appeals Court Affirms War Exclusion Does Not Apply to Cyber AttackppBloomberg Law reported three insurers filed with the court on Wednesday and that the settlement is confidential Merck has not responded to a request for commentpp
Could Recent NotPetya Case Outcomes Pressure Insurers to Reword War Exclusions
Lloyds Insurers Must Exclude StateBacked CyberAttacks to Avoid Systemic Risks
From Pandemic to Cyber War Clear Policy Wording Is Key for Insurers
Cyber Lessons for the Insurance Industry Continue Three Years After NotPetyappMore than 30 insurers were involved in the case at the start but many have since resolved their claims with Merck Eight insurers that remained in the case included Ace American Allianz Liberty Mutual QBE XL and Lloyds syndicates Mercks property insurance program included the all risks property policies in a threelayer structure with 175 billion in total limits above a 150 million deductible The remaining eight insurers policies insured percentages of coverage in one two or all three of the layers In total they disputed about 700 million in coverage or just under 40 of Mercks total coverage for the policy periodppThe insurers had tried to use the exclusions to avoid paying Mercks claim citing the fact the NotPetya malware was attributed to Russia and was meant to be deployed to disrupt and destabilize Ukraine The malware wound up affecting thousands of companies worldwideppThe state appellate court ruling upheld a January 2022 state trial court decision that the war exclusions in the drugmakers policies did not applyppRelated Court Siding With Merck Over War Exclusion for Cyberattack a Warning to InsurersppThe state appeals panel concluded the insurers did not demonstrate that the NotPetya attack was a hostile or warlike action and thus the exclusion could not be used While insurers conceded the word warlike in the exclusion might not be applicable they asserted the word hostile should be read in the broadest possible senseppThe case though specific to New Jersey had been closely followed by the insurance industry and it highlighted the risk of embedded cyber risk within noncyber policies Following the massive cyberattack which also resulted in another highprofile coverage dispute between Mondelez International and insurer Zurich American Insurance Company the industry looked to shore up policy language in order avoid any perception of ambiguity by adding cyberspecific exclusions to property and liability contracts The Lloyds Market Association released four model war and cyber war exclusionspp
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Could Recent NotPetya Case Outcomes Pressure Insurers to Reword War Exclusions
Lloyds Insurers Must Exclude StateBacked CyberAttacks to Avoid Systemic Risks
From Pandemic to Cyber War Clear Policy Wording Is Key for Insurers
Cyber Lessons for the Insurance Industry Continue Three Years After NotPetyappMore than 30 insurers were involved in the case at the start but many have since resolved their claims with Merck Eight insurers that remained in the case included Ace American Allianz Liberty Mutual QBE XL and Lloyds syndicates Mercks property insurance program included the all risks property policies in a threelayer structure with 175 billion in total limits above a 150 million deductible The remaining eight insurers policies insured percentages of coverage in one two or all three of the layers In total they disputed about 700 million in coverage or just under 40 of Mercks total coverage for the policy periodppThe insurers had tried to use the exclusions to avoid paying Mercks claim citing the fact the NotPetya malware was attributed to Russia and was meant to be deployed to disrupt and destabilize Ukraine The malware wound up affecting thousands of companies worldwideppThe state appellate court ruling upheld a January 2022 state trial court decision that the war exclusions in the drugmakers policies did not applyppRelated Court Siding With Merck Over War Exclusion for Cyberattack a Warning to InsurersppThe state appeals panel concluded the insurers did not demonstrate that the NotPetya attack was a hostile or warlike action and thus the exclusion could not be used While insurers conceded the word warlike in the exclusion might not be applicable they asserted the word hostile should be read in the broadest possible senseppThe case though specific to New Jersey had been closely followed by the insurance industry and it highlighted the risk of embedded cyber risk within noncyber policies Following the massive cyberattack which also resulted in another highprofile coverage dispute between Mondelez International and insurer Zurich American Insurance Company the industry looked to shore up policy language in order avoid any perception of ambiguity by adding cyberspecific exclusions to property and liability contracts The Lloyds Market Association released four model war and cyber war exclusionspp
Topics
Carriers
ppWas this article valuableppThank you Please tell us what we can do to improve this articleppThank you of people found this article valuable Please tell us what you liked about itppHere are more articles you may enjoyppGet automatic alerts for this topicppYour email address will not be published Required fields are marked ppName ppEmail ppCommentpp
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