This Means War! NJ Court Examines Whether Cyber Attack Is Excluded Under Policy
In January, 2022, in Merck v. ACE American Insurance Company, a New Jersey Superior Court Law Division Judge ruled that a cyberattack, for insurance coverage purposes, cannot simply be excluded based on a wartime exclusion. What does it mean for insurance companies?
A cyberattack is an unfortunate side effect of the advances in technology and it is clear that this form of attack is not going away anytime soon. Some insurance policies have the longstanding wartime exclusion language that meant to apply to armed conflict but in this case, the court placed the burden on insurance companies to put its insured on notice that cyberattacks are not covered because of the wartime exclusion. If such notice is not sufficient, then insurance company cannot escape the coverage. The court emphasis the importance of phrasing the contract to properly reflect the reasonable expectations of the insured when facing ambiguous language in the policy. This decision can mean two things for insurance companies: 1) it’s time to take a look at the policy and add in language to clarify the scope of wartime exclusion to put insured on notice, or 2) for non-cyber polices, it’s time to add an ironclad cyber exclusion to limit exposure.
Thanks to Yifan Li for her contribution to this post. Please contact Heather Aquino with any questions.
Read MoreIntroducing WCM’s 2022 First Year Associates
We are pleased to introduce WCM’s newest team of first year associates, who are starting with us this week across our New Jersey, New York and Pennsylvania offices. New Jersey Harry Harnitchek is a graduate of Rutgers Law School and was a staff editor on the Rutgers Journal of Law and Public Policy. Harry completed undergraduate studies at the University of Pittsburgh. Prior to joining WCM, Harry was a judicial intern for various magistrate judges and interned with the Montgomery County Public Defender’s Office. Harry is an avid gardener and chess player. Yifan (Sherry) Lin is a graduate of Brooklyn Law School and was president and founder of the International Law School Organization and member of the ADR Honor Society. Sherry completed undergraduate studies at Rutgers University. Prior to joining WCM, Sherry interned with an immigration firm and was a judicial intern for a New York County Supreme Court judge. Sherry is native proficient in Mandarin, and elementary proficient in Japanese and Italian. New York Alexander Rabhan is a graduate of Benjamin Cardozo School of Law and was president of the mentorship program for the first years and senator of the Student Bar Association. Alex completed undergraduate studies at the University of Miami. Prior to joining WCM, Alex interned with several civil litigation firms and with the New York Legal Assistance Group. Christopher Palmieri is a graduate of Touro College Jacob D. Fuchsberg Law Center and was an editor on Law Review. Chris completed undergraduate studies at Pennsylvania State University. Prior to joining WCM, Chris interned with a commercial litigation firm, interned with a Nassau County Supreme Court judge, and worked as a legal assistant. Lauren Howard is a graduate of St. John’s University School of Law and was a staff member of the New York Real Property Journal. Lauren completed undergraduate studies at SUNY Geneseo. Prior to joining WCM, Lauren interned with a civil litigation firm, an employment and labor litigation firm, and participated in a litigation clinic that focused on consumer justice for the elderly. Rebecca Pasternak is a graduate of St. John’s University School of Law and was an editor on the New York International Law Review. Rebecca completed undergraduate studies at SUNY Binghamton. Prior to joining WCM, Rebecca was an MLB salary arbitration intern and an intern with the US Court of Appeals for the Second Circuit’s civil appeals mediation program. Pennsylvania Brenna Jeffries is a graduate of Drexel University Thomas R. Kline School of Law and was a member of its Moot Court Board. Brenna completed undergraduate studies at Townson University. Prior to joining WCM, participated in internships that focused on elder law and with the Philadelphia Legal Assistance. Erin Gallagher is a graduate of Temple University James E. Beasley School of Law and was a staff editor on Temple Law Review. Erin completed undergraduate studies at Brown University. Prior to joining WCM, Erin interned with the US Department of Education – Office for Civil Rights and was a legal research assistant for various professors. Erin is fluent in German. Erin Russell is a graduate of Drexel University Thomas R. Kline School of Law and was on the Moot Court Board. Erin completed undergraduate studies at Franklin & Marshall College. Prior to joining WCM, Erin interned with a commercial litigation firm and was a judicial intern with the United States District Court for the Eastern District of Pennsylvania. Erin is an avid softball player. Haley Matthes is a graduate of Widener University Delaware Law School and was a member of Phi Alpha Delta Law Society. Haley completed undergraduate studies at Lafayette College. Haley was a summer intern at WCM and prior to that interned with the Northampton County Court of Pleas, with The Office of Pennsylvania Attorney General, and was selected as the only intern to serve The Office of Roderick Stewart, MP in London, England. Jean Scanlan is a graduate of Villanova University Charles Widger School of Law and was a member of the St. Thomas Moore, Pro Bono and Family Law Societies. Jean completed undergraduate studies at Temple University. Jean was a summer intern at WCM and prior to that was a judicial extern with the Court of Common Pleas – Civil Division. Sarah Polacek is a graduate of Drexel University Thomas R. Kline School of Law and was an editor on Law Review. Sarah completed undergraduate studies at the University of Delaware. Prior to joining WCM, Sarah interned with civil litigation and family law firms and was a judicial intern with the United States District Court for the Eastern District of Pennsylvania. Stephen Kerstein is a graduate of Temple University James E. Beasley School of Law and was a staff editor on Temple Law Review and president of the Jewish Law Students Association. Stephen completed undergraduate studies at Indiana University. Prior to joining WCM, Stephen interned with a civil litigation firm, was a class and research assistant for two professors and interned with a congressman in the US House of Representative.Read MorePeer-to-Peer Carsharing and Insurance Implications (PA)
A new law was introduced in the House Appropriations Committee as an amendment to Senate Bill 1222 and officially became law on July 11th. The amendment outlines the coverage requirements for companies engaging in peer-to-peer carsharing, mandating an additional layer of insurance so injured third parties won’t be left uninsured if a car owner’s policy includes exceptions for livery, or business activities. Peer to peer carsharing is the process of renting vehicles from other people rather than traditional car rental companies. It has been coined “AirBnB for cars” and provides many benefits including lower prices and more variety in vehicle choices. The fledgling industry is not without complications, primarily on the insurance and regulatory fronts. Chief among the insurance issues is that some carsharing networks’ fine print says a renter’s personal auto policy would be the primary source for paying claims, even though most personal policies typically exclude renting or driving car-sharing vehicles from coverage. Some attorneys have noted the amendment is similar in substance to another proposed bill on the topic – Senate Bill 548. The bill, introduced in April 2021, was aimed at putting carshare companies on a more equal footing with car rental companies and to ensure additional protections for owners, drivers and third parties now that carsharing is on the rise. From the defense and carrier standpoint, the new law does not invalidate exclusions that are already in place, and it requires carsharing companies to provide coverage that would otherwise be out of bounds under the owner’s policy. However, litigators on the plaintiffs side have raised questions about the measure’s effectiveness in protecting the parties. Some have expressed concerns that because consumers’ personal auto insurance may contain an exclusion, they may be forced to rent these cars using the companies’ minimum insurance policies, which likely won’t provide adequate coverage in the event of an accident. One thing lawyers on both sides of the issue can agree on is that these new disputes will be headed to the courts. Thanks to Sydney Kockler for her contribution to this post. Please contact Heather Aquino with any questions.Read MoreNJ Court Upholds Virus Exclusion
The Superior Court of New Jersey, Appellate Division recently dealt with a plaintiff’s coverage claim for business interruption cause by the COVID-19 pandemic and Governor Philip D. Murphy’s Executive Order 107(EO 107). EO 107 was a mandate which cancelled large gatherings of individuals, required the closure of “the brick-and-mortar premises of all nonessential retail business,” and mandated the closure of “[a]ll recreational and entertainment business.” The Plaintiff was a country club whose business involved the pre-contracting and pre-planning of social events, such as weddings. Plaintiff was forced to shut down its venue in March 2020 pending further orders from Governor Murphy and later brought suit against its insurer seeking among other things, a declaratory judgment that its insurer was required to provide business interruption coverage for losses sustained while the plaintiff could not operate its business. The policy’s business interruption provision provided coverage for “the actual loss of business income … due to the necessary interruption of business operations … due to direct physical loss of or direct physical damage to property caused by or resulting from a covered cause of loss[.]” Additionally, the policy also contained “Civil Authority” provision which provided coverage for loss of business income when access to plaintiff’s scheduled premises is “specifically prohibited by order of a civil authority as the direct result of a covered cause of loss to property in the immediate area.” However, the policy also contained a “virus exclusion” which stated that the insured would not pay for losses caused directly or indirectly by the “presence, growth, proliferation, spread or any activity of ‘fungus,’ wet rot, dry rot, bacteria or virus.” Ruling in favor of the insurer, the court found that (1) plaintiff’s inability to use its premises to host large social gatherings did not constitute physical loss or damage to its property; (2) plaintiff was not entitled to coverage the Civil Authority provision because the provision required that access to plaintiff’s property be prohibited by a civil authority “as the direct result of a covered cause of loss to property in the immediate area.” (3) Lastly, finding that EO 107 was issued in response to the COVID-19 virus and therefore was caused directly or indirectly by the virus, the court held that the virus exclusion bars any claim for coverage under the policy. Thanks to Steven Kaufman for his contribution to this post. Please contact Heather Aquino with any questions.Read MoreCall Your Next Witness – The 15 Commandments of Billing
What better topic to discuss during these hot Summer months than effective legal billing! Georgia and Brian recently compiled “The 5 Commandments of Billing,” and with new associates starting at firms across the United States after Labor Day weekend, we opted to commit our 15 Commandments to the podcast. Link to the episode is here. The goal of this episode is to focus on the skill of billing — and it is a skill — in order to maximize the recovery on the work we do as attorneys. Much like insurance, legal billing is an area that law school ignores completely, but is essential for the majority of attorneys to master. If you’d like a pdf of the 15 Commandments of Billing, or are interested in being a guest on the podcast, please email Brian Gibbons or Georgia CoatsRead MoreWCM Welcomes Steve Kim and Craig Chaney to our NJ Office
WCM is pleased to announce the return of Steve Kim, and welcomes Craig Chaney, both at the rank of counsel in our New Jersey office. Steve previously worked for WCM as a litigation associate from 2014 – 2019. During that time, he handled complex, large exposure cases, consistently achieving favorable results for our clients. Steve returns having gained further experience in managing, training, and leading a legal team consisting of young associates, paralegals and legal assistants related to personal injury defense of high-profile clientele. Craig is a skilled litigator with over two decades of experience in insurance defense and insurance coverage litigation. He is a trial attorney whose practice focuses on defense of complex general liability claims and premises liability claims. Steve and Craig present a strong addition to WCM’s defense practice in New Jersey.Read MoreWCM Is Pleased To Introduce Our 2022 Summer Associates
New Jersey
Ryan Dame is a rising 3L at Brooklyn Law School who will graduate early in December 2022 as part of the accelerated program. Ryan is a graduate of the University of California, San Diego with a degree in political science. Prior to joining WCM, Ryan served our country as a member of the United States Marine Corp. where Ryan was a collateral duty quality assurance representative and a master training specialist. Most recently, Ryan interned with ECPAT-USA and for a civil judge in Supreme Court of the State of New York, Kings County.
Steve Kaufman is a rising 3L at Cardozo School of Law and a graduate of the University of Miami where Steve earned a degree in history with a minor in entrepreneurship. Prior to joining WCM, Steve interned for a civil judge in Supreme Court of the State of New York, Suffolk County and interned with a commercial law firm with a focus on domain transfers and securities regulation. Steve also dabbled in the music industry during his undergraduate years.
New York
Sara Cardamone is a rising 3L at St. John’s University School of Law and a graduate of the University of Pittsburgh with a degree in communication and sociology. Prior to joining WCM, Sara interned for a civil judge in Supreme Court of the State of New York, New York County and interned with the New York State Division of Human Rights with a focus on assisting in the investigation of discrimination complaints.
Andrew Henriquez is a rising 3L at St. John’s University School of Law and a graduate of Brown University with a degree in public policy and economics. Prior to joining WCM, Andrew participated in a variety of internships, including with the Office of the New York City Comptroller, Bureau of Law and Adjustment and also worked as an assistant paralegal at an immigration firm. Andrew has also volunteered with the Consumer Credit Court Observation Project and the New York City Community Emergency Response Team.
Michelle Palagi is a rising 3L at Cardozo School of Law and a graduate of Baruch College with a degree in industrial/organizational psychology. Prior to joining WCM, Michelle interned with an employment law firm and the Orthodox Union and participated in a divorce mediation clinic. Michelle speaks many languages including Hebrew and Georgian.
Mark Rodriguez is a rising 3L at Brooklyn Law School and a graduate of Siena College with a degree in history. Prior to joining WCM, Mark interned with a New York law firm with a focus on medical malpractice, sexual assault and personal injury cases and was a legal fellow with Touro Law Center. Mark is an avid Mets fan.
Alexa Schimp is a rising 3L at St. John’s University School of Law and a graduate of The Catholic University of America with a degree in philosophy. Prior to joining WCM, Alexa was a legal extern for the Girls Scouts of America, interned with Legal Outreach and was a legal resource assistant for an intellectual property firm. Alexa is a literature buff with a focus on WWII/Holocaust history and also dabbles in experimental cooking.
Brian Tully is a rising 3L at St. John’s University School of Law and a graduate of the University of Virginia. Prior to joining WCM, Brian participated in various judicial internships and externships, including with Surrogate’s Court – 10th District Nassau County and New York State Supreme Court, Nassau County.
Pennsylvania
Sydney Kockler is a rising 3L at Villanova University School of Law and a graduate of the University of Pittsburgh with a degree in political science and communication. Prior to joining WCM, Sydney participated in various internships and externships, including with the US Attorney’s Office for the Eastern District of Pennsylvania, the Pennsylvania Office of Attorney General, and Bravo with a focus on research-based blogs and developing social copy to accompany web posts for Facebook and Twitter.
Jack McGuire is a rising 3L at Villanova University School of Law and a graduate of the University of Notre Dame with a degree in economics and minors in computing digital technology and public service. Jack also was selected for Notre Dame’s study abroad program and did a semester on Berlin, German. Jack’s vast interests include chess, juggling, basketball, soccer, badminton and volleyball. Prior to joining WCM, Jack interned with the US Bankruptcy Court for the Western District of Pennsylvania.
Domenica Tomasetti is a rising 3L at Villanova University School of Law and a graduate of The Catholic University of America with a degree in political science with a minor in psychology. Prior to joining WCM, Domenica interned with one of the justices of the Delaware County Court of Common Pleas, was a legal research assistant for a Villanova professor and interned with the Office of the District Attorney in Delaware County. Domenica was also an assistant women’s basketball coach while at Catholic University.
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