ANALYSIS: Say What You Mean: Merck’s NJ Cyber Coverage Fight

An insurance case pending in New Jersey’s high court could decide whether a war exclusion affects coverage for a cyberattack against Merck. The case highlights some important basic principles of insurance contract interpretation, but may have a limited reach because of the issues involved.

Going to War Over Exclusions

The case—Merck & Co. v. ACE American Insurance Co.—implicates an “all risk” property policy for a massive cyberattack that damaged thousands of Merck’s computers.

Traditionally, an insurer like ACE would resist coverage for a cyberattack under a property policy. Many first-party property insurance policies require damage to or ...