AI Executive Scam Case Highlights Cyber Coverage Limits

Dustin Cho was quoted in a Law360 article examining how artificial intelligence-powered deepfake fraud is exposing potential limitations in cyber and crime insurance coverage. Dustin explained that companies concerned about deepfake schemes may find coverage under computer fraud provisions in crime policies, particularly where those provisions apply to the use of a computer or the fraudulent entry or manipulation of data.

Dustin noted that, despite discussion of AI-related exclusions, the use of AI tools may make the case for coverage under certain computer fraud provisions more straightforward. He also pointed to the Second Circuit’s decision in Medidata Solutions Inc. v. Federal Insurance Co., which found that an employee’s actions did not break the causal chain between fraudulent conduct and the resulting loss for purposes of insurance coverage.