The Authors
Judy SelbyKennedys
Judy Selby (judy.selby@kennedyslaw.com) is a Partner at Kennedys (New York) where she focuses her practice primarily on insurance coverage matters with a concentration in coverage for exposures arising out of emerging technology, digital, and compliance risks.
Tracey KlineKennedys
Tracey M.Kline (tracey.kline@kennedyslaw.com) is an Associate at Kennedys (Philadelphia) where she focuses her practice primarily on insurance coverage litigation and cyber matters.
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Ohio Supreme Court Ruling Sends Important Reminder:
Long-Standing, Fundamental Principles of Insurance Policy Construction and Law Are Applicable to Cyber Claims
Abstract: On December 27, 2022, the Ohio Supreme Court unanimously ruled that a business owner’s property insurance policy issued by Owners Insurance Co. to EMOI Services, LLC did not afford coverage for losses sustained in a ransomware attack because computer software is “entirely intangible” and “cannot experience ‘direct physical loss or physical damage.’” EMOI Servs., LLC. v. Owners Ins. Co., 2022-Ohio-4649 (Ohio 2022). In doing so, the court reversed an attention-getting split decision by the lower appellate court. This article takes an in-depth look at the case and discusses its significant implications.
The Ohio Supreme Court’s decision was based on its commonsense conclusions that software (as intangible property) cannot suffer physical damage, and that coverage for restoration of information under the Electronic Equipment Endorsement could not be triggered absent the threshold requirement of “direct physical loss or damage” to the media on which the information was stored. Although claims involving cyber events may be relatively new, this decision is an important reminder that long-standing, fundamental principles of insurance policy construction and law are applicable to cyber claims.
A graduate of Rutgers University School of Law at Camden, Franklin Solomon is based in Cherry Hill, NJ, with a practice focused on evaluation, litigation and resolution of healthcare “liens” and reimbursement claims. Mr. Solomon represents personal injury victims and their attorneys in defending against claims by health plans and government benefits programs seeking payment out of tort recoveries. Among his significant cases in the field, Mr. Solomon argued before the New Jersey Supreme Court in Perreira v. Rediger, 169 N.J. 399 (2001), obtaining a decision which prohibited health insurers’ reimbursement claims against their insureds’ tort recoveries. He was plaintiffs’ counsel in Levine v. United Healthcare, 402 F.3d 156 (3d Cir. 2005), a federal class action challenging reimbursement claims of ERISA-governed health plans. He was also appellate counsel in Wurtz v. The Rawlings Company, 761 F.3d (2d Cir. 2014), a class action challenging New York insurers’ reimbursement claims against their insureds, and was plaintiffs’ counsel in Taransky v. Sebelius, 760 F.3d 307 (3d Cir. 2014), a class action challenging Medicare’s claims for reimbursement out of tort recoveries. More recently Mr. Solomon was appellate counsel in Arnone v. Aetna, 860 F.3d 97 (2d Cir. 2017), a decision which subjected ERISA plan disability insurers to state anti-subrogation law. Prior to opening his own firm, Mr. Solomon’s practice included 20 years of litigating mass tort and individual personal injury claims on behalf of plaintiffs.
rett Newman is known nationally by plaintiff attorneys for his expertise on claims avoidance and reduction. Recognizing the ever-growing nature of lien resolution and the ever-increasing associated liability, Brett established Newman Settlement Services Group to assist both individual claimants of personal injury lawsuits and mass tort claimants in the protection of their proceeds and government benefits. 
