War Exclusion Doesn't Bar Merck's $1.4B Cyber Loss

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By Daphne Zhang (January 14, 2022, 8:38 PM EST) — Property policies’ war exclusions do not apply to cyberattacks, a New Jersey state court ruled, siding with pharma giant Merck Inc.’s stance that its insurers cannot assert the exclusion to avoid coverage of its more than $1.4 billion losses from a 2017 cyberattack.

Merck alleges that 15 carriers breached insurance contracts by refusing to cover the pharmaceutical company’s losses from a June 2017 malware attack under its $1.75 billion property policies. (AP Photo/Seth Wenig) State Superior Court Judge Thomas J. Walsh granted Merck’s bid for partial summary judgment, finding the war exclusion precludes only a physical act of warfare instead of a…

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