'Related Claims' Issue Central to Zoom's $90M Coverage Row


Zoom's battle with two groups of excess insurers over $90 million in legal costs in actions over allegations of data security problems may hinge on whether an initial government probe and follow-on civil lawsuits constitute one or multiple claims — a recurring issue in errors and omissions insurance disputes.

Zoom was a rare success story during the COVID-19 pandemic, as its video-conferencing technology allowed companies across many industries to pivot their employees to work remotely. However, by the time Zoom's growth surged, it was already facing a Federal Trade Commission investigation into privacy and data security concerns on its platform.

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Joshua Gold of Anderson Kill PC, who represents policyholders, said companies in Zoom's position need to take inventory of available insurance when "the genie escaped the bottle" in terms of the company's liability exposure.

"We've seen insurance companies flip-flop on interrelated claims all the time," Gold said. "We're seeing the looseness of the language to mean what the insurer wants it to mean depending on its interests."

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Policyholder attorneys said it's rare to have an incident that isn't arguably connected with other claims because, at some level, everything is "related" to each other. The challenge for Zoom and its insurers is that the language is so uncertain and that the outcome could go both ways, according to Gold.

"There is huge risk involved because this is so much in the eye of the beholder on what's related and distinct," he said. "I've never been convinced that there is a bright-line test for insurance companies on what's related or unrelated."

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Cyber Insurance Recovery Attorney | Anderson Kill P.C.
Joshua Gold
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