Ownership Key in Posco Daewoo Social Engineering Claim

When an imposter of Daewoo, an importer and exporter of chemicals, contacted Daewoo’s customer, Allnex, to request payment to a “new” Wells Fargo account, Allnex made the requested payment. Daewoo discovered the fraud but only after $367,613 had been transferred. Daewoo appealed to their insurance carrier, Travelers, for coverage. Travelers rejected the claim because Daewoo did not satisfy the ownership requirement of their coverage. The U.S. District Court for the District of New Jersey agreed in 2017. This fall Daewoo re-pleaded the claim with some “creative” arguments about constructive ownership which failed to sway the Court’s decision. Read their creative ownership descriptions and the important lessons learned here.