Erin Moore, a shareholder of Green & Green, Lawyers, prevailed for her client, the appellant, Owners Insurance Company, in EMOI Services, LLC v. Owners Insurance Company, Slip Opinion No. 2022-Ohio-4649, decided by the Ohio Supreme Court on December 27, 2022.
In EMOI Services, LLC v. Owners Insurance Company, the unanimous Court agreed that the business property insurance policy at issue, which by its terms required “direct physical loss of or damage to” property, did not provide coverage for losses claimed due to a ransomware attack on appellee’s computer systems where there was no “direct physical loss of or damage to” the hardware or media on which the software was stored. In reaching this conclusion, the Court found that under the policy terms, “covered media” means media that had a physical existence and that software itself, independent of that media, as information or a set of instructions, does not have a physical existence.
The Court expressly held that the language in the electronic equipment endorsement in the policy was “clear and unambiguous” in its requirement that there be physical loss or physical damage and that since software is an inherently an intangible item that cannot experience direct physical loss or direct physical damage, there was no applicable coverage.