SAN FRANCISCO—Ransomware may be the hot-button issue within the cyber landscape and, for the time being, ransom paid to hackers is covered by insurers.
From Advisen’s Cyber Risk Insights Conference here earlier this month, Samantha Riley, partner at Nicolaides Fink Thorpe Michaelides, said she has handled a “huge uptick” in claims on behalf of insurance carriers, who are paying out the claims under cyber extortion coverage.
Confirming Riley’s observation, Mickey Estey, senior vice president of E&O, cyber and media at RT ProExec of RT Specialty, said insurers have paid in the past with “not a lot of dispute.”
But could that change?
Tom Kang, cyber product manager for The Hartford, said the monetary demands from hackers are typical ranging from four- to five-figures, but his concern is that hackers begin to raise demands quickly.
“Carriers are comfortable [paying claims related to ransomware],” said Kang. But an increase in demands could “force the market to contemplate the coverage.”
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Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
