While the Arizona Appellate Court found limited coverage for a computer fraud attack against the insured, it also determined there were multiple occurrences. AIMS Ins. Program Managers, Inc. v. Nat'l Fire Ins. Co., 2921 Ariz. App. Unpub. LEXIS 123 (Ariz. Ct. App. Feb. 4, 2021).     Thieves secretly accessed from an employee of AIMS Insurance Program Manager, Inc. (AIMS) an email accouint to fraudulently intercept payments from AIMS to the vendor, AmWINS Brokerage of Arizona. The thieves created email accounts using the names of actual AmWINS employees and opened accounts at AmWINS' bank. The thieves then intercepted emails transmitting insurance binders and invoices from AmWINS to AIMS and replaced them with fraudulent emails, attaching the intercepted insurance binders that directed AIMS to wire payments to the thieves' accounts.      AIMS authorized three wire transfers, totaling $357,711.64 to the thieves in partial payment of three invoices. When AmWINS notified AIMS that it had not received payment on the invoices the fraud was discovered. AIMS was able to recover less than a quarter of the wire-transferred funds from its bank.      AIMS submitted a claim to its insurer, National Fire, who agreed to pay $10,000, the policy limit for a single occurrence under the "Computer Fraud'" endorsement of the policy. Coverage was denied, however, under the "Forgery and Alteration Endorsement."     AIMS sued for declaratory judgment and the parties filed cross-motions for summary judgment. The superior court granted summary judgment in favor of National Fire.     The forgery endorsement only insured against losses from forgeries of written promises, orders, or directions to pay a sum certain that were "similar," meaning of the same nature as checks, drafts, promissory notes, and bills of exchange. Neither the emails nor the attached insurance binders and invoices were endorsable instruments payable upon tender in the same manner as negotiable instruments.     Regarding the number of occurrences, AIMS argued that each distinct act of fraud, namely each of the three counterfeit demands for payment, constituted a discrete "occurrence" of covered fraud under the endorsement. Therefore, the fraudulent actions resulted in three occurrences under the policy, not just one. The court agreed and AIMS was entitled to recover the per-occurrence limit of $10,000 for three occurrences. 

from Insurance Law Hawaii https://ift.tt/3tqJN9n