When Hackers Strike, Property Insurance May Not Offer Protection
Some policies written before cybercrime became rampant have outdated terms that can leave companies exposed.
When Mondelez International Inc., the maker of Oreo cookies and Cadbury chocolate, suffered a malware attack in 2017, it thought the property insurance policy it had taken out years earlier with Zurich Insurance Group AG would help cover the more than $100 million in losses Mondelez estimated it had suffered.
Zurich saw things differently. The insurer classified the attacks, which also hit servers of several other big companies, including Merck & Co. and A.P. Moller-Maersk AS, as an act of war. Since the Mondelez policy has a clause that excludes acts of war, the insurer denied the claim. Mondelez is suing Zurich for $100 million, claiming the coverage is warranted and calling the insurer’s response “unreasonable,” according to court documents.