The court denied the insurer’s motion to dismiss the insured’s complaint seeking coverage for a cyber loss. Balgo Technologies, LLC v. Hiscox Ins. Co, Inc., 2025 U.S. Dist. LEXIS 251531 (M.D. Fla. Dec. 5, 2025).

Balgo was a financial technology company with an online platform enabling customers to utilize artificial intelligence tools to manage their investments. Balgo held a Cyber and Data Risk Solution Policy from Hiscox. The policy provided coverage for loss of reputation and business income.

Balgo alleged that a recently hired Chief Executive Officer was terminated due to his deleting client files resulting in a data breach and the shutting down of Balgo’s business for over two months. Balgo alleged the damage from this data breach included that it was unable to bill customers, obtain new customers, significantly decreased its revenue and caused additional expenses. Balgo notified Hiscox of the loss. Hiscox denied coverage.

Suit was filed against Hiscox for breach of contract. Hiscox moved to dismiss.

The policy provided coverage for “loss incurred by you in excess of the retention resulting from a data breach.” Loss meant “breach costs” and “business interruption costs.”

Hiscox moved to dismiss because Balgo failed to identify an express provision in the policy that created an obligation that had been breached.

Balgo alleged that it sustained a loss due to a data breach. Data breach was not further defined by the policy. The court ruled that Balgo alleged that the policy provided coverage for damages caused by a data breach and further detailed the type of breach and type of damages. These allegations were sufficient to survive a motion to dismiss