Merck's insurance case over the NotPetya cyber attack to be heard by the New Jersey Supreme Court
In a significant development, the New Jersey Supreme Court has agreed to review the legal dispute between pharmaceutical giant Merck and several top insurance providers over $1.4 billion in claims related to the 2017 NotPetya cyberattack.
This decision comes after a New Jersey appellate court upheld a lower court ruling in favour of Merck. Peter Halprin, an insurance recovery attorney and partner at Pasich, supports this ruling, expressing his belief that the courts have reiterated key insurance policy interpretation principles. According to Halprin, these principles emphasise all-risk coverage, the breadth of coverage provisions, and the narrow construction of exclusionary language.
Halprin further states that insurers should draft clear and unambiguous exclusionary language, and courts will not rewrite exclusionary language. He believes that the contract language in effect during the original attack in 2017 may have little effect on coverage decisions now.
Michael Dion, vice president and senior analyst at Moody's, shares similar views, noting that the New Jersey Supreme Court's willingness to hear the case is promising for the consortium of insurers involved in the dispute.
The case is being closely watched due to the rise in ransomware attacks and nation-state activity related to the Russia-Ukraine conflict. It's important to note that this is not the first cyberattack-related insurance dispute. Snack food giant Mondelez previously settled its own NotPetya court case with Zurich.
Interestingly, the insurance market has shown signs of increasing stability, with premium increases beginning to moderate. However, global cyber insurance prices rose 11% during the first quarter of the year, down from 28% during the fourth quarter of 2022. By January, Beazley announced the historic sale of a cyber catastrophe bond.
Despite extensive searches, no public decision or precedent has yet been established on this matter. Without further authoritative sources reporting on this New Jersey Supreme Court review or ruling, it appears no decision has been made yet.
As the legal battle unfolds, both parties will undoubtedly present their arguments, and the court's decision could potentially set a significant precedent for future cyber insurance coverage disputes.
[1] [4] [5] - These references are to legal news articles about Merck, New Jersey Supreme Court cases, and insurance coverage disputes but do not reference this specific case or precedent-setting decision on the NotPetya cyberattack claims.
- The business world is closely monitoring the legal dispute between Merck and insurance providers over $1.4 billion in claims related to the 2017 NotPetya cyberattack, as the New Jersey Supreme Court has agreed to review the case.
- Peter Halprin, an insurance recovery attorney, believes the courts have reiterated key insurance policy interpretation principles, such as all-risk coverage, the breadth of coverage provisions, and the narrow construction of exclusionary language in this dispute.
- The rising trend of ransomware attacks and nation-state activity related to the Russia-Ukraine conflict has made this case particularly significant, adding to the general-news coverage surrounding cybersecurity and technology.
- The court's decision in this case could potentially set a significant precedent for future cyber insurance coverage disputes, as both parties present their arguments and await a decision.
