"Dusting Off an Old Law" – Insurance Coverage for Trespass to Chattels Claims

"Dusting Off an Old Law" – Insurance Coverage for Trespass to Chattels Claims

“Trespass to chattels”?!?  Isn’t that a doctrine that was dead and buried, brought up only to torment…educate first year law students?  Not any more!  In the electronic age, the trespass to chattels doctrine has been revived.  It has been used for all sorts of claims, including anti-spam claims, network interference claims, and more.
 
 
Of course, if you’re like me, you wonder, “Is there insurance available to cover such claims?”  I wrote an article, along with two colleagues of mine, in which I address those questions.  Risk and Insurance just published the piece.
 
 
As computer technology rapidly advances, legislatures often cannot enact laws quickly enough to respond to new cybersecurity risks. Enterprising lawyers, however, have turned to old legal doctrines for relief. The doctrine of “trespass to chattels,” for example, is an antiquated term that once was buried in the dusty pages of old law dictionaries. But lawyers who handle cybersecurity issues, including allegations of spam, viruses, worms, unauthorized access, and more, have revived the doctrine as a means of redress. For companies facing potential liabilities based on such allegations, the availability of insurance coverage is critical to navigate the nuances of the ever-changing landscape.
 
 
Is there coverage for such claims?
 
 
Although designed to cover a wide range of risks that could befall a business, many standard form “traditional” insurance policies do not explicitly mention cybersecurity or claims arising out of online activity. But look closely, because coverage can still be available. For example, commercial general liability (CGL) insurance policies, the basic insurance policies bought by thousands of companies every year, provide, in standard form, two basic coverages relevant to this question: coverage for liability arising out of “property damage” and coverage for liability arising out of “personal and advertising injury.” Both coverages might apply to potential liability for a trespass to chattels claim.
 
 
Where should a company look when facing trespass to chattels claims?
Although designed to cover a wide range of risks that could befall a business, many standard form “traditional” insurance policies do not explicitly mention cybersecurity or claims arising out of online activity. But look closely, because coverage can still be available. For example, commercial general liability (CGL) insurance policies, the basic insurance policies bought by thousands of companies every year, provide, in standard form, two basic coverages relevant to this question: coverage for liability arising out of “property damage” and coverage for liability arising out of “personal and advertising injury.” Both coverages might apply to potential liability for a trespass to chattels claim.
 
 
For the analysis of property damage and personal and advertising injury coverage in CGL policies for trespass to chattels claims, click on over to Risk and Insurance to read the full piece.
 
 
Scott N. Godes is counsel in Dickstein Shapiro’s Insurance Coverage Practice.