By The Restoration HQ desk · · filed under Coverage Law
Court caps a builder's email-fraud loss at the cyber policy's social-engineering sublimit
In Perry & Perry Builders v. Cowbell Cyber / Obsidian Specialty Insurance, a builder that got tricked into wiring money on a fraudulent payment instruction found its recovery capped by the cyber policy's social-engineering / funds-transfer-fraud sublimit, not the full policy limit.
FORSpend an hour this week reading the social-engineering sublimit on your cyber policy. It's the cheapest risk fix you'll make all year, and it's the one nobody does.
AGAINSTCyber insurance is selling you a number that isn't real. If the sublimit covers a tenth of an actual wire-fraud loss, the policy is theater, and a callback-verification rule on every payment change protects you better than the premium does.
Consensus vs. contrarianConsensus is "buy cyber insurance." The sharper operator take: insurance is the backstop, not the control. A dead-simple rule, verify every banking-change request by phone to a known number, stops the loss the sublimit was never going to fully cover.
Sources Merlin Law Group, www.propertyinsurancecoveragelaw.com/blog/cy… (published )