Merck Scores Win In Insurance Battle Over Cyberattack - Bloomberg Report

Bloomberg reported that Merck & Co Inc MRK has won a long-running legal battle to force its insurer to cover the costs of damages caused by the NotPetya' ransomware' attacks.

• Merck and its insurers have been battling over $1.4 billion in losses from the attack in 2017 after filing a lawsuit seeking to reclaim financial losses from the "NotPetya" incident.
• Many companies, including Merck, found their insurer refusing to pay because of an exclusion in their policy for "acts of war."
• A New Jersey superior court judge has now ruled that the language therein implies armed conflict rather than the cyber kind.
• This week, New Jersey Superior Court Judge Thomas J. Walsh concluded that the act of war exclusion doesn't apply, Bloomberg reports because it's intended for actual armed conflict.
• Citing the "the plain meaning of the language in the exclusion," the court found that the act of war exclusion "does not apply," he wrote. 
• Both sides are aware that cyberattacks from various sources have "become more common," the judge wrote, but the insurers didn't change their contract language to inform Merck that cyberattacks would be excluded.
• "Having failed to change the policy language, Merck had every right to anticipate that the exclusion applied only to traditional forms of warfare," the judge wrote.
• As a result of the attack, Merck suffered financial losses as the illicit software spread to the Company's computers and resulted in a disruption of "worldwide operations including manufacturing, research, and sales operations," it said in a subsequent annual report. 
• Price Action: MRK shares are down 0.92% at $80.01 during the market session on the last check Friday.