THE SHOP

October '21

Issue link: https://nbm.uberflip.com/i/1407320

Contents of this Issue

Navigation

Page 13 of 103

10 THE SHOP OCTOBER 2021 INSURANCE OPTIONS The answer to the question of whether tra- ditional insurance policies cover losses due to cyberattacks and cybersecurity breaches outside the relatively new cyber insurance policies is, at least temporarily, yes. A federal court in Maryland recently ruled that an insurance company must cover the costs of software, data, computers and servers that were lost or damaged by ransomware under the property insurance coverage of one business owner's insurance policy. Since ransomware attacks are becoming easier for cybercriminals to execute, it makes sense for every performance, restyling and customization professional to look into fortifying their operation's digital assets and making sure they have business interruption coverage in the event of an attack. Business interruption insurance can only help the shop regain some of the finan- cial loss resulting from a security breach, however. To protect against cyber risks, professionals are beginning to add cyber insurance to their business insurance poli- cies. Cyber insurance offers broad cover- ages to help protect the operation's various technology-related risks. So-called data breach insurance helps businesses respond to breaches and usu- ally offers sufficient protection for small companies. Cyber liability insurance, on the other hand, is typically used by larger businesses and offers more coverage to help prepare for, respond to and recover from cyberattacks. It should be noted that most cyber poli- cies require permission to be secured before any ransom is paid. The same requirement also applies to extortion-related expenses. And remember, most cyber-related insur- ance policies provide reimbursement for a ransom payment and related expenses— they don't pay the costs upfront. PAYMENT MECHANICS Although paying ransom in a cyberattack is not recommended, all too often it can be necessary. Ransomware attacks usu- ally call for sending crypto- currency in order to unlock data, with amounts ranging from a few hundred to, in an increasing number of cases, millions of dollars. Ransomware Understanding Unfortunately, paying the ransom does not guarantee the user will get the decryption key or unlock code needed to regain access to the infected computer system or files being held hostage. Although paying ransom in a cyberattack is not recommended, all too often it can be necessary. Most cyber-related insurance policies provide reimbursement for a ransom payment and related expenses. They don't pay the costs upfront.

Articles in this issue

view archives of THE SHOP - October '21