Cyber: Gone “phishing” schemes may not be covered by insurance.

A recent court ruling in TX determined that the insurer in this case is not required to compensate a property management company for funds lost in a phishing scheme because it never technically held the funds.

The property manager utilized a third party to process payments.  The payment processor held the funds in their bank before being passed to the property manager.   Hackers used the property manager’s credentials to access funds held by the payment processor and divert them to another recipient.   

Although the property manager had insurance policies for cyber related crimes, their claim was denied by the carrier as they never had rights to the funds when they were diverted from the processors bank. 

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