Hanover Insurer Loses Bid to Duck Arizona Beverages Audit Costs

A federal appeals court dealt a blow to a Hanover Insurance Group Inc. unit, ruling that its policy offered broad coverage for extra expenses stemming from a computer system outage.

The policy covered extra expenses related to all property damage caused by the incident—including for a related audit conducted by Deloitte LLP—not just to the specific equipment that was initially damaged, the US Court of Appeals for the Second Circuit said in a Tuesday summary order.

“Having concluded that Arizona incurred the Audit Expenses during the policy’s restoration period, we agree with the district court that those expenses are ...