We insure a business under an MSO Business Owners Policy. The insured used a company that would handle its point of sale. This company was hacked, and the money our insured was owed by this company was diverted to several accounts set up by the hacker to steal the money.
The insured has reported this to the police, the FBI is involved, and they have presented a claim for the theft of money. In reviewing the policy, I do not believe this loss meets the definition of a covered loss by the policy.
New Jersey Subscriber
We do not see coverage for this loss under the MSO policy. Once the funds left the insured's premises and reached the point of sale company, it was in the care, custody and control of that company.
This is a hacking situation at the point of sale company, and they are the entity that should make restitution to the insured, whether through insurance or otherwise.
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.