A federal judge's holding that an AIG unit cannot lay claim to RealPage's recoveries of phishing losses that it did not originally insure is a win for policyholders as disputes over cyber loss coverage and related subrogation become more common, experts told Law360.

A federal court ruled last week that National Union Fire Insurance Co. of Pittsburgh, Pa. can only seek reimbursement from a $2.9 million recovery by property management software company RealPage Inc. if those funds are considered a recovery of a loss National Union covered.

National Union had argued that the allocation of recovery provision in its crime policy with RealPage was intended to apply to uncovered losses, but the court ruled that the provision followed the rest of the policy in only being applicable to National Union's and RealPage's duties with respect to losses from covered occurrences.

******

National Union's actions in the current case would be particularly aggravating from the policyholder perspective given its previous actions, policyholder attorneys said.

"It would be one thing if the insurance company said 'hey, we're going to use our network of security consultants and contacts with law enforcement to try and get this money back,' but usually the recovery efforts are between law enforcement and the policyholder's efforts, not the insurance company's," said Anderson Kill PC partner Joshua Gold.

******

Read the full article HERE.