Second & Sixth Circuits Find Social Engineering Triggers Crime Coverage

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Recently, the U.S. Court of Appeals for the Second Circuit, applying New York law, and the U.S. Court of Appeals for the Sixth Circuit, applying Michigan law, respectively, agreed with an insured that the computer fraud provisions of a crime policy covered the loss incurred when the company’s employees transferred funds in response to a spoofed email. While the courts’ orders have limited precedential effect, the decisions are getting attention.