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The reach of holdings that demonstrable physical injury be proven in order to trigger property insurance policy coverage under policies which require "direct physical loss of or damage to" property, is illustrated by the holding in EMOI Serv's, L.L.C. v. Owners Ins. Co., ___ N.E.3d ___, No. 2021-1529, 2022 WL 17905839 (Ohio Dec. 27, 2022) (stated "PRELIMINARY COPY, SUBJECT TO FURTHER EDITING").
In EMOI Services , the issue was whether "a businessowners insurance policy issued by appellant, Owners Insurance Co. ('Owners'), and held by appellee, EMOI Services, LLC ('EMOI'), covers losses that resulted from a ransomware attack on EMOI's computer-software systems." EMOI Services, 2022 WL 17905839, ¶ 1, at *1. The issue was so clear in the eyes of the Ohio Supreme Court that no trial would be required.
The businessowners insurance policy at issue conditioned coverage on a “direct physical loss of or damage to” the property in question in the loss, in this case, the software. As there was no demonstrated direct physical loss of or damage to software as a result of a ransomware attack on EMOI, "Owners is not responsible for covering the resulting loss." EMOI Services, 2022 WL 17905839, ¶ 1, at *1.
The contrary intermediate appellate court decision was reversed and the trial court's entry of summary judgment was "reinstated" on EMOI's alleged claims for breach of contract and for insurer bad faith in Owner's denial of coverage.
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