"I love HOME : Fidelity Blog - FCL LLP"

2022-06-14 20:42:25

Skip to contentHOMEABOUTRESOURCESCONTACTHOMEfid-admin2021-02-19T00:56:19-05:00FCL Fidelity BlogFidelity. Covered.RealPage: U.S. District Court finds Funds lost by Third Party Payments Processor do not meet Commercial Crime Policy’s Ownership Condition In the recent decision of RealPage Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa,, the U.S. District Court for the Northern District of Texas held that funds lost by a third party payments processor as a result of a phishing scheme perpetrated on an insured did not meet the commercial crime policy’s ownership condition.  The Court found that the “hold” requirement of the condition requires possession of funds, as opposed to the ability to direct the movement of funds.  The Court also held that RealPage’s after-the-fact reimbursements to its clients did not constitute a “direct loss” underBy Chris McKibbin|2021-04-09T08:28:46-04:00April 9th, 2021|Continue ReadingMississippi Silicon: Fifth Circuit finds No Coverage for Social Engineering Fraud Loss under Crime Policy’s Computer Fraud CoverageOn February 4, 2021, the Fifth Circuit Court of Appeals released its decision in Mississippi Silicon Holdings, LLC v. AXIS Insurance Company. In affirming the lower court’s grant of summary judgment in favour of AXIS, the Fifth Circuit made important findings regarding the proper scope of the Computer Fraud coverage; whether a fraudster’s opening of a “fraudulent channel” in an insured’s email system meets the requirements of that coverage; and whether it is appropriate to consider a policy’s Social Engineering Fraud (SEF) coverage in interpreting the scope of the Computer Fraud coverage. The Facts Mississippi Silicon Holdings, LLC (“MSH”) isBy Chris McKibbin|2021-03-10T01:36:39-05:00March 10th, 2021|Continue ReadingSanderina: U.S. District Court Finds No Coverage for Social Engineering Fraud Loss under Crime PolicyIn the recent decision of Sanderina, LLC v. Great American Insurance Company, the U.S. District Court for the District of Nevada rejected an insured’s claim that a social engineering fraud loss arising from a “phony executive” email scam was covered under a commercial crime policy. Following leading U.S. authorities such as the Ninth Circuit’s Taylor & Lieberman decision (see our April 3, 2017 post), the Court found that none of the Forgery, Computer Fraud or Funds Transfer Fraud insuring agreements responded in respect of the email scam. The Facts In 2017, an unknown third party sent a series of emailsBy Chris McKibbin|2021-02-16T08:58:20-05:00September 19th, 2019|Continue ReadingC.S. McCrossan Inc.: Eighth Circuit applies Crime Policy’s Authorized Representative Exclusion in finding No Coverage for loss caused by Insured’s Property Manager’s EmployeeOn August 6, 2019 the Eighth Circuit Court of Appeals released its decision in C.S. McCrossan Inc. v. Federal Insurance Company.  The decision addresses a host of coverage issues, including the application of the “Authorized Representative” exclusion and the definitions of “Subsidiary” and “Contractual Independent Contractor.”  The case is instructive for fidelity claims and underwriting professionals, as well as brokers and corporate risk managers.   The Facts C.S. McCrossan Inc. (“McCrossan”) maintained a subsidiary, Blakeley Properties, LLC (“Blakeley”).  One of McCrossan’s owners also owned a separate company, Stewart Properties, LLC (“Stewart”).   Blakeley and Stewart owned commercial rental properties.  Through intermediateBy Chris McKibbin|2021-02-16T02:24:13-05:00August 14th, 2019|Continue ReadingStarr: New York Supreme Court applies Termination condition in finding No Coverage under Fidelity Bond for Loss caused to Insurer by Managing General AgentIn the recent decision of Starr Insurance Holdings, Inc. v. United States Specialty Insurance Company, the Supreme Court of the State of New York held that the termination condition applied to terminate coverage in respect of losses allegedly caused to an insured insurance company (itself a holder of a fidelity bond issued by two other carriers) by the insured’s managing general agent (“MGA”)/broker.  Finding that the insured knew of the MGA’s dishonest acts prior to obtaining fidelity coverage, the Court applied the bond’s termination condition to hold that coverage terminated in respect of the MGA as of the inception ofBy Chris McKibbin|2020-02-13T06:59:30-05:00May 22nd, 2019|Continue ReadingPosco Daewoo: U.S. District Court applies Ownership Condition in rejecting Creditor’s “Reverse” Social Engineering Fraud Claim under its own Crime PolicyOn November 19, 2018, the U.S. District Court for the District of New Jersey released its decision in Posco Daewoo America Corp. v. Allnex USA, Inc. and Travelers Casualty and Surety Company of America.  The decision represents a “sequel” to the Court’s 2017 decision arising out of the same claim (see our November 6, 2017 post).  The case features an interesting twist on the usual social engineering fraud claim scenario, in that it was the intended payee of the funds, not the payor, which asserted a claim under its own crime policy for recovery of funds which the payor hadBy Chris McKibbin|2020-02-13T05:43:38-05:00November 26th, 2018|Continue Reading12NextLoad More Posts.fusion-widget-area-1{padding:0 0 0 0}.fusion-widget-area-1 .widget h4{color:#464646}.fusion-widget-area-1 .widget .heading h4{color:#464646}SUBSCRIBE TO THIS BLOG BLOG EDITORChris McKibbinPARTNERTOPICSAuthorized Access/Entry ExclusionAuthorized Representative ExclusionBills of Exchange Act (Canada)Computer FraudCounterfeitDirect LossEmployee TheftForgeryFunds Transfer FraudInventory ExclusionManifest IntentOther PropertyOutside Investment Advisor RiderOwnershipPrior InsuranceSecurities Broker ExclusionSecurities CoverageSocial Engineering FraudStandingSubrogationSubsidiarySuit Limitation ProvisionTerminationARCHIVESARCHIVESSelect Month April 2021 March 2021 September 2019 August 2019 May 2019 November 2018 October 2018 May 2018 January 2018 November 2017 October 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 November 2016 October 2016 September 2016 August 2016 July 2016 April 2016 March 2016 February 2016 January 2016 December 2015 October 2015 September 2015 July 2015 June 2015 May 2015 April 2015 March 2015 February 2015 January 2015 RECENT POSTSRealPage: U.S. District Court finds Funds lost by Third Party Payments Processor do not meet Commercial Crime Policy’s Ownership ConditionMississippi Silicon: Fifth Circuit finds No Coverage for Social Engineering Fraud Loss under Crime Policy’s Computer Fraud CoverageSanderina: U.S. District Court Finds No Coverage for Social Engineering Fraud Loss under Crime PolicyC.S. McCrossan Inc.: Eighth Circuit applies Crime Policy’s Authorized Representative Exclusion in finding No Coverage for loss caused by Insured’s Property Manager’s EmployeeStarr: New York Supreme Court applies Termination condition in finding No Coverage under Fidelity Bond for Loss caused to Insurer by Managing General AgentLATEST TWEETSTweets by @FCL_LLP © FCL 2019