Travelers Insurance Must Cover Company’s Cyber Scam Payout

The Travelers Cos. Inc. must cover $834,000 in losses under an insurance policy after a manufacturer paid that amount in an online scam, a federal circuit court ruled.

Insurance companies can be on the line for such payouts if policyholders unwittingly fall for phishing schemes, in which hackers use email credentials to trick others into sending sensitive information or cash payments. Policyholders who frequently don’t know the extent of their coverage make claims for hacking or fraud attacks. Insurance providers often are hesitant to provide sweeping coverage.

American Tooling Company is due the money under the insurer’s computer crime provision ...