The United States District Court for the Western District of Missouri granted summary judgment in favor of our client, an insurer, following competing summary judgment motions regarding the applicability of the electronic data exclusion in a commercial general liability insurance policy. The claimant, a charity, had contracted with our client’s insured, a production company, to produce and livestream a virtual fundraising auction. Right before the start of the live auction, the internet connection was interrupted by an unknown cause, which severed the link connecting the livestream to the auction site. Because of this severed connection, viewers could not see live auction items on the livestream while bidding on their electronic devices, such as phones and laptops, as planned, resulting in fewer bids and less money raised. The claimant asserted that the loss of internet resulting in lower bids constituted a loss of use of tangible property—the phones and laptops that could not bid on the auction items while viewing the livestream—and therefore the loss was covered by the CGL policy. We argued that, under the unambiguous policy language, the loss fell under the electronic data exclusion because the participants were still able to use their phone and laptops, they simply could not view the livestream of the auction or use the bidding software in conjunction with the livestream; the livestream and bidding software were electronic data. The district court agreed with our argument, finding that the electronic data exclusion was unambiguous and applied to bar coverage for the loss.
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