Insurers Must Also Comply With Their Policy Provisions

Judge Tosses Data Breach Coverage Suit for Failure to Mediate (C.D.Cal.)
– Reuters

Reuters interviewed Manatt's Susan White, a partner in the firm's Insurance Recovery practice, for an article on the dismissal of Columbia Casualty Co.'s complaint against Cottage Health System. U.S. District Judge Dean D. Pregerson of the Central District of California dismissed the case, because the parties are required to exhaust nonjudicial remedies under the cyberpolicy's alternative dispute resolution provision.

"I thought it was a good decision," White said. "Columbia put in its policy an ADR provision and, instead of complying with its very own provision, it tried to do a preemptive strike by filing suit against the insured."

"Judge Pregerson's ruling demonstrates that this is not appropriate, and they do need to comply with their own policy provisions," White added. "Hopefully, it will make insurers think twice about this kind of conduct in the future."