Surprise – Spearphishing Losses Not Covered by Cyber Insurance

Apache Corporation is an oil-production company based in Texas.

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In 2013, Apache was the victim of a Business Email Compromise (BEC), losing $2.4 million. At the heart of the scheme was a spearphishing email that appeared to come from Apache’s vendor Petrofac Limited.  Apache filed a claim for the  loss with its cyber insurance carrier, Great American Insurance Company.  On October 18, 2016, the United States Court of Appeals for the Fifth Circuit ruled that cyber insurance did not cover the email fraud.

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