White and Williams LLP Secures Trio of Cyber Coverage Wins

Case Results

Gabriel Darwick and Sean Elman

4.30.26

Three weeks, three jurisdictions, three cyber wins.

White and Williams picked up the first victory on March 9, 2026, in the United States District Court for the Western District of Texas, where the court granted summary judgment to their client enforcing a Cyber Crime Loss sublimit. See Perry & Perry Builders, Inc. v. Cowbell Cyber and Obsidian Specialty Ins. Co., 2026 U.S. Dist. LEXIS 49409 (E.D. Tex. Mar. 9, 2026). In Perry, the insured was deceived into transferring money intended for a vendor to an unintended third party. The insurer acknowledged that the loss was covered and paid the insured the policy’s Cyber Crime Loss sublimit. Discontent with a single sublimit, the insured argued that because it wired the money to the fraudster in separate transfers, it was entitled to a second Cyber Crime Loss sublimit.

The court rejected the insured’s arguments and noted that the insured was hard-pressed to make the argument that the number of claims or losses that it could assert under the policy depended on the insured’s own bookkeeping choices. In granting summary judgment to the insurer, the court held that the express terms of the policy capped what the insurer was required to pay for all of the insured’s cybercrime losses during the policy period, regardless of the number and value of each such loss. The court found that because the insurer paid the insured the Cyber Crime Loss sublimit, the insurer had no further liability and the insured was entitled to nothing more.

Four days later, on March 13, 2026, White and Williams secured another victory for a cyber insurer in the United States District Court for the Southern District of Ohio. See Spinnaker Ins. Co. v. Heart of Gold Title, LLC, 2026 U.S. Dist. LEXIS 52449 (S.D. Ohio Mar. 13, 2026). In that case buyers of a property retained a broker to assist in the purchase of an investment property. After viewing a property, the buyers executed a purchase agreement and were advised to send the earnest money deposit to the insured, a title company. The insured provided wire transfer instructions and the buyer promptly transferred the funds. A short time later, a fraudster, impersonating the insured’s employee, sent an e-mail to the buyers requesting the balance of the purchase price and provided false wiring instructions. After confirming the instructions, the buyers wired the funds to the fraudster. The fraud was discovered days later.

Rather than report the fraud when it occurred in winter 2023, the insured waited until the buyer filed suit in fall 2024. The cyber insurer denied coverage on the basis that the claim was not made and reported under the 2023 policy, and as to the 2024 policy, it was barred due to late notice and the prior knowledge exclusion.

The court agreed with the insurer’s disclaimer of coverage and granted the insurer’s motion to dismiss. First, the court noted that the 2023 policy was a claims-made and reported policy and since the claim was made and reported during the 2023 policy, the 2023 policy was not triggered. Second, the court held that the insured’s notice under the 2024 policy was untimely, recognizing that the insured’s own allegations demonstrated that it had facts that would cause a reasonable person to believe that a covered loss had occurred. Finally, the court also held that the prior knowledge exclusion under the 2024 policy barred coverage as the insured was aware of the cyber incident and/or security breach before the policy period.

To cap off the month of March, the United States District Court for the Northern District of Mississippi granted a pre-answer motion to dismiss to White and Williams’ client. See Gore, Kilpatrick & Dambrino, PLLC v. Spinnaker Ins. Co., 2026 U.S. Dist. LEXIS 69567 (N.D. Miss. Mar. 31, 2026). In Gore, the fraudster used a false identity to contact the insured law firm requesting the law firm’s assistance with recovering a debt. After the fraudster advised the insured that the debtor agreed to pay the debt, the insured received correspondence and a check from the debtor for the fake debt owed to the fraudster. Both the correspondence and the check were from the fraudster. After the insured deposited the check into its trust account, the fraudster contacted the insured and requested that the insured deduct its attorney’s fees from the check and wire the remaining balance to him. After doing so, the check was returned as unpaid. This entire transaction between the fraudster and the insured was a scam.

The insured sought coverage under the Social Engineering Coverage Endorsement of its cyber policy. The insurer denied coverage because the Social Engineering Coverage Endorsement only provided coverage where the insured is intentionally misled by an instruction transmitted via e-mail, purporting to be from a natural person or entity who exchanges, or is contract to exchange, goods or services with the insured for a fee, which contained a fraudulent and material misrepresentation, and was sent by an imposter. The insurer asserted that the express terms of the policy did not cover an entirely fictional transaction.

The court agreed, finding that the real entity that the fraudster purported to be was not a person who exchanged or was under contract to exchange goods or services with the insured for a fee because it was not and never had been the insured’s client. The court further found that the instruction to transfer money could not have been sent by an imposter purporting to be a client if the individual giving the instruction was the client. Accordingly, the court granted the insurer’s motion to dismiss.

Gabe Darwick led White and Williams’ representation of the insurers with the assistance of Sean Elman. If you have questions about these cases or are dealing with similar issues, please don’t hesitate to contact us. You can reach Gabe at darwickg@whiteandwilliams.com and Sean at elmans@whiteandwilliams.com.