Security News > 2023 > May > Insurers can't use 'act of war' excuse to avoid Merck's $1.4B NotPetya payout

Merck's insurers can't use an "Act of war" clause to deny the pharmaceutical giant an enormous payout to clean up its NotPetya infection, a court has ruled.

A New Jersey appellate court this week upheld [PDF] an earlier decision that a group of insurers could not use the war exclusion in their insurance policies - despite the US and UK governments, among others others, attributing NotPetya to Kremlin-backed fiends - because the attack against Merck wasn't specifically linked to Russian military action.

At the time, Merck's property insurance program included policies that covered "All risks" with $1.75 billion in total limits above a $150 million deductible, according to court documents.

In January 2022, the Superior Court of New Jersey awarded the pharma titan $1.4 billion after Merck sued eight of its insurers over their denial of coverage for weathering attack.

Mondelez International settled its lawsuit against Zurich American Insurance Company, which it brought because the insurer refused to cover the snack giant's $100-million-plus cleanup bill following the 2017 NotPetya outbreak.

The Merck ruling "Sets this precedent, where you have an attack that was associated with a certain region, but was not considered an act of war," Lance told The Register.

News URL

https://go.theregister.com/feed/www.theregister.com/2023/05/03/merck_14bn_insurance_payout_upheld/