What happened: ACE Property & Casualty alleges eBay's cyberstalking settlement is not covered by its $50 million excess policy because senior executives directed the harassment.
Who's involved: ACE Property & Casualty Insurance Company (excess insurer) and eBay (policyholder), plus three former eBay executives named as defendants.
What's at stake: Coverage under a $50 million commercial umbrella policy for a settlement reportedly worth nearly $48.7 million in compensation.
Why it matters: The case tests whether intended-harm and criminal-act exclusions apply when corporate leadership directed the conduct, and whether settling without insurer consent forfeits excess coverage.
Where it stands: Complaint filed November 12, 2026.
A former CIA operative, live spiders, a funeral wreath, and a pig mask delivered to a couple's front door. That was the campaign eBay's security team allegedly ran against the couple behind an e-commerce trade publication in 2019 - and now eBay's excess insurer says none of it should be covered.
ACE Property & Casualty Insurance Company filed a complaint on November 12 in the US District Court for the Northern District of California, asking a judge to confirm that its $50 million commercial umbrella policy does not require it to cover eBay's settlement of the cyberstalking lawsuit brought by the publishers of EcommerceBytes, an online trade publication that reported on e-commerce platforms including eBay.
The filing lands months after eBay and three former executives settled with the couple. According to widely reported figures, the settlement totaled nearly $48.7 million in compensation, with eBay contributing $46.15 million and the individual executives paying the rest (AP, July 29, 2026). ACE's policy sits above a Zurich American Insurance Company primary policy with $1 million per-occurrence limits, plus other underlying insurance.
The heart of ACE's case is that eBay's most senior leaders did not just tolerate the harassment - they ordered it. The complaint quotes a string of text messages between eBay's then-CEO, its then-chief communications officer, and its then-senior vice president of global operations that, ACE alleges, show a deliberate campaign to silence the couple's critical reporting.
According to the complaint, the communications officer texted the CEO a link to an article about the CEO's pay with the words, "We are going to crush this lady." Months later, the CEO allegedly texted back: "If we are ever going to take her down . . . now is the time."
What followed, the complaint alleges, was an exchange in which the communications officer forwarded that message to eBay's security chief - a former operative with the CIA's National Clandestine Service who managed over 300 employees in 95 locations worldwide. The security chief asked for confirmation: "[CEO] said to burn her to the ground correct?" The reply, according to the filing: "She is a biased troll who needs to get BURNED DOWN."
The security chief then laid out a timeline. "I have a plan B // I will put it in motion // will take two weeks." The communications officer replied that he would "embrace managing any bad fall out" and said, "We need to STOP her."
When the security chief later asked whether neutralizing the publication's website within two weeks would work, the response was blunt: "I want to see ashes. As long as it takes. Whatever it takes."
Over two weeks in August 2019, the complaint alleges, eBay employees sent the couple anonymous deliveries including live spiders, fly larvae, live cockroaches, a Halloween pig mask, a book titled "Grief Diaries: Surviving Loss of a Spouse," and a funeral wreath ordered with a prepaid debit card. They also allegedly posted the couple's home address on Twitter, placed a Craigslist ad in their names seeking sexual partners, sent pornographic magazines to their neighbors in the husband's name, and tried to install a GPS tracker on their car.
All of this was done on company time and on eBay's dime, the complaint alleges. Seven members of eBay's security team eventually pleaded guilty to federal crimes related to the campaign.
eBay itself struck a deal with federal prosecutors in the District of Massachusetts in January 2024, entering what is known as a deferred prosecution agreement - essentially, the government filed criminal charges but agreed to hold off on prosecuting as long as eBay met certain conditions over three years. As part of the deal, the complaint states, eBay "admitted, accepted, and acknowledged that it is responsible under United States law for the acts of its officers, directors, employees, and agents" and agreed to pay a $3 million criminal penalty.
ACE is not just arguing that the harassment was too extreme to insure. It is pointing to specific policy language it says bars coverage.
The ACE Policy excludes bodily injury or property damage "expected or intended from the standpoint of the insured." It also excludes personal injury "caused by or at the direction of the insured with the knowledge that the act would violate the rights of another" or "arising out of a criminal act committed by or at the direction of the insured." ACE also points to a California law that bars insurers from covering losses caused by the insured's own deliberate acts.
Beyond the exclusions, ACE raises a separate argument: eBay settled without asking. According to the complaint, eBay and the individual defendants negotiated and finalized the settlement without sharing the proposed terms with ACE, without getting ACE's sign-off, and without splitting the settlement between compensatory and punitive damages - a detail that matters because punitive damages are not insurable under California law, according to the complaint. ACE alleges it repeatedly asked for documents and information to evaluate the claim, and that one or more defendants failed to hand them over.
The complaint also alleges eBay made public admissions of responsibility - including in its January 2024 answer to the civil lawsuit, where eBay "accepted responsibility for the acts of its officers, directors, employees, and agents" - without ACE's consent.
The case is at its earliest stage. eBay has not yet responded. ACE has brought two legal claims: one asking the court to declare whether ACE owes anything under the policy, and a breach-of-contract claim seeking damages tied to the settlement it says was made without its consent. ACE has demanded a jury trial.
For excess claims teams, the case is a sharp reminder of how intended-acts exclusions, criminal-act bars, and consent-to-settle clauses can all converge when a policyholder's own leadership is alleged to have directed the underlying misconduct - and where the insured has already accepted criminal responsibility.
The allegations in ACE's complaint have not been tested, and no court has ruled on the merits.
