Recently, the Indiana Supreme Court was called upon to interpret the phrase, "resulting directly from the use of a computer," in an insurance policy providing Commercial Crime Coverage with a Computer Fraud provision. The policyholder, G&G Oil, paid ransom demanded by a computer hacker in that case. G&G's claim was denied by its insurance carrier, Continental Western.
The Supreme Court held that the ransom payment was a covered loss:
Analyzing G&G Oil's actions in this case, its transfer of Bitcoin was nearly the immediate result—without significant deviation—from the use of a computer. Though certainly G&G Oil's transfer was voluntary, it was made only after consulting with the FBI and other computer tech services. The designated evidence indicates G&G Oil's operations were shut down, and without access to its computer files, it is reasonable to assume G&G Oil would have incurred even greater loss to its business and profitability. These payments were “voluntary” only in the sense G&G Oil consciously made the payment. To us, however, the payment more closely resembled one made under duress. Under those circumstances, the “voluntary” payment was not so remote that it broke the causal chain. Therefore, we find that G&G Oil's losses “resulted directly from the use of a computer.”
G&G Oil Co. of Ind. Inc. v. Continental W. Ins. Co., 165 N.E.3d 82 (Ind. 2021) (quotation follows Headnote 16 in the Westlaw version; pinpoint page numbers not available at this time.)
The Indiana Supreme Court decided this issue after the trial court entered summary judgment for the insurance company and the intermediate appellate court affirmed. The Supreme Court reversed and remanded with instructions that neither the policyholder nor the insurance company was entitled to summary judgment on the record before it.
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