This week, in EMOI Services, LLC v. Owners Insurance Company, the Ohio Supreme Court held that a ransomware attack on a medical billing company did not cause direct physical loss of or damage to software, where the company’s computer equipment remained unharmed. The Court further explained that the computer software does not have a material existence and, therefore, cannot suffer direct physical loss or damage. A copy of the opinion can be found here.
This opinion is the latest in a long line of divergent decisions across the United States. As the world grows increasingly digital, decisions like these will likely have far-reaching impacts on other, related issues, such as losses involving cryptocurrency or NFTs.
HKR will continue to monitor this important issue and report on any further developments. If you have any questions or would like additional information, please contact any member of HKR’s team.