Universal American Corp. v. National Union Fire Insurance, 16 N.Y.S.3d 21

Universal American Corp. sought indemnification under rider No. 3 of its bond for losses from fraudulent Medicare Advantage claims.
The rider covers Computer Systems Fraud: loss from a fraudulent entry or change to electronic data or a computer program within the insured’s system.
The entry or change must cause property transfer, account alterations, or unauthorized/fictitious accounts to be debited/credited.
Universal incurred over $18 million in losses for fraudulent claims for services never provided; post-deductible losses were denied by National Union.
Lower courts held the rider covers only unauthorized access (hacking) and not fraudulent content entered by authorized users; Appellate Division affirmed.
The issue on appeal is whether the rider unambiguously covers losses from fraudulent content entered by authorized users.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the rider cover losses from fraudulent content entered by authorized users?	Universal contends fraudulent input falls within 'fraudulent entry'.	National Union argues coverage is limited to unauthorized access, i.e., hacking.	No; rider unambiguously covers unauthorized access, not content entered by authorized users.
What is the proper reading of 'fraudulent entry' and 'entry'/'change' in the rider?	Fraudulent entry could include input by authorized users.	Fraudulent entry targets deceitful access to the system.	Unambiguous; covers unauthorized access (hacking) to the computer system.
Is the rider ambiguous in light of other provisions and headings?	Headings might support broader fraud coverage.	Headings and exclusions show focus on computer systems and unauthorized access.	Not ambiguous; language and structure manifest coverage of unauthorized access.

Vigilant Ins. Co. v. Bear Stearns Cos., Inc., 10 N.Y.3d 170 (N.Y. 2008) (unambiguous contract interpretation governs insurance terms)
White v. Continental Cas. Co., 9 N.Y.3d 264 (N.Y. 2007) (plain meaning and reasonable expectations guide interpretation)
Brooke Group v JCH Syndicate, 87 N.Y.2d 530 (N.Y. 1996) (ambiguity arises from reasonable interpretations; ordinary speech standard)
Ellington v. EMI Music, Inc., 24 N.Y.3d 239 (N.Y. 2014) (ambiguity and contract interpretation principles for contracts of adhesion)
Mostow v. State Farm Ins. Cos., 88 N.Y.2d 321 (N.Y. 1996) (insurance contracts interpreted by reasonable expectations of insured)
Cragg v. Allstate Indem. Corp., 17 N.Y.3d 118 (N.Y. 2011) (insurance contract interpretation consistent with ordinary meaning)