The federal district court for the District of Minnesota recently granted summary judgment in favor of Fishbowl Solutions, Inc. against Hanover Insurance Company for coverage of two fraudulent invoice payments. The case is called Fishbowl Sols., Inc. v. Hanover Ins. Co., 2022 U.S. Dist. LEXIS 200210 (D. Minn. 2022). 

Facts

Fishbowl Solutions provides technological consulting and software development services for its clients and sends invoices, which may be paid via check, debit card, or wire transfer, when work is completed. In November 2019, an unknown bad actor implemented certain "rules" on the email account of Fishbowl's senior staff accountant. These rules diverted emails that used payment-related keywords–invoice, wire transfer, and payment, for example–to an unaffiliated email account that the bad actor subsequently used to impersonate both Fishbowl clients and the senior staff accountant. The bad actor then diverted two invoices, from the same Fishbowl client, worth nearly $177,000 to an account under the bad actor's control. The client was able to recover roughly $29,000 of the payment, but not the remaining funds.