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Underscoring that insurance coverage for cyber claims can come under different insurance products, a recent decision by the U.S. Court of Appeals for the Fifth Circuit held that the policyholder is entitled to defense coverage under a CGL policy for a $20 million lawsuit after a cyberattack grabbed payment card information from its computer systems.

In Landry’s Inc. v. the Insurance Co. of the State of Pennsylvania, No. 19-20430 (5th Cir., July 21, 2021), the Fifth Circuit reversed a trial court ruling that had favored the insurance company. Policyholder Landry’s, a multi-brand restaurant and hospitality company, had been sued for more than $20 million by its merchant bank Paymentech after Visa and Mastercard had assessed damages against Paymentech for payment card fraud charges and replacement expenses stemming from a hacker’s theft of payment card information at certain Landry locations.

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