On appeal, a group of insurers argued before the New Jersey Appellate Division that damage and financial loss to Merck resulting from the 2017 NotPetya cyberattack launched by Russia, in connection with its ongoing conflict with Ukraine, should be excluded under the Hostile or Warlike Act exclusion in the policy. Philip Silverberg, representing several of Merck’s insurers, commented,
“NotPetya was massive…It was a virtual cyber nuclear attack.”
In 2021, the lower court agreed with Merck, finding that the Hostile or Warlike Act exclusion applied only to “traditional forms of warfare,” and therefore did not apply to the NotPetya cyberattack. A three-judge panel is now considering the interlocutory appeal submitted by the insurers. The decision will be significant to the insurance industry with respect to the applicability of a Hostile or Warlike Act exclusion to the ever-evolving forms of modern warfare.
Phil represented Zurich American Insurance Company in a suit brought against Zurich by Mondelez International Inc., another company that was impacted by NotPetya. That matter was settled shortly before closing arguments after two weeks of trial in the Circuit Court of Cook County, Illinois.