A California judge Thursday said underwriters at Lloyd’s of London did not breach an errors and omissions policy when denying coverage for Zoom Video Communications Inc.’s $85 million settlement of a consolidated class action for privacy violations that allowed hackers to engage in “Zoombombing.”
The judge in Zoom Video Communications Inc. v. Underwriters at Lloyd’s, London et al. ruled that a civil investigative demand, or CID, issued by the Federal Trade Commission did not constitute a claim under the 2018-2019 excess E&O policy because it only requested documents, rather than a nonmonetary form of relief.
The FTC’s CID did not trigger the Lloyd’s 2018-209 policy because lawsuits filed against Zoom in 2020 are not interrelated, the judge said.
Additionally, the judge said the agency’s request for documents was not a regulatory proceeding because it was acting under the Federal Trade Commission Act as opposed to a cyber or privacy law.
Lloyd’s insurers and Evanston Insurance Co. issued excess E&O policies to Zoom that were in effect from 2018 to 2019, and Continental Casualty, Allied World Specialty Insurance Co. and Endurance Risk Solutions Assurance Co. issued E&O policies in effect from 2019 to 2020. Zoom sued the insurers in May 2022, saying the insurers breached their policies when denying coverage for its August 2021 settlement of suits accusing it of violating users’ privacy rights.
The San Jose, California-based tech company resolved its dispute with the other insurers, leaving only its claims against Lloyd’s. The parties filed competing motions for summary judgment on whether the FTC’s requests for information triggered the policy.
Representatives for the parties did not respond to requests for comment.
