Travelers, Policyholder Agree to Void Current Cyber Policy
Travelers and policyholder International Control Services (ICS) jointly filed a stipulation to have a federal court rescind an active cyber insurance policy that the insurer claimed was void due to the insured’s misrepresentation of multi-factor authentication use.
According to documents filed Aug. 26 in U.S. District Court for the Central District of Illinois, Travelers and the Decatur, Illinois-based electronics manufacturing services company have agreed “no insurance coverage shall be available to any person or entity under the policy for past, present, and future claims, suits, loss, costs, or expenses of any kind whatsoever.”
Furthermore, Travelers and ICS agree to have the court rescind the policy and declare it “null and void, from its inception,” according to the latest filing signed by the insurer’s representation and ICS President Dennis Espinoza, who also signed the application for cyber insurance and multi-factor authentication (MFA) attestation in March, court records showed.
The original CyberRisk Tech policy from Travelers was effective April 4, 2022 to April 4, 2023 but following a ransomware event at ICS in May, Travelers said it first learned ICS misrepresented its use of MFA on the insurance application. Travelers said the misinformation “materially affected the acceptance of the risk and/or the hazard assumed by Travelers.” The insurer in July asked the district court for a ruling to rescind the policy.
Travelers Wants Out of Contract With Insured That Allegedly Misrepresented MFA Use
Travelers’ original motion to rescind the policy was thought to be one of the first court filings of its kind over an insured’s use of MFA, which has become a requirement by most insurers to get cyber insurance.
According to the motion, Travelers and ICS together entered an order to dismiss with prejudice, and each have agreed to pay its own fees and costs.
The case is Travelers Property Casualty Co. of America v. International Control Services Inc., No. 22-cv-2145
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