$20 million cyberinsurance for ransomware attacks. What is the advantage of hiring this policy?
Baltimore government officials have made public their intention to renew their $20 million cybersecurity insurance, which was contracted a year ago after government computer systems were infected with a variant of ransomware. This service is provided by Chubb Insurance and AXA XL.
This insurance will allow the city government to cover expenses arising from any new attempt at cyberattack, including investigation processes, coverage of activity disruption losses, recovery process, among other expenses. The city will invest about $110,000 more than last year.
Brandon Scott, a city official, created a committee responsible for cybersecurity in Baltimore after the ransomware incident in 2019. Scott is the main driver of this initiative, because he believes that the city cannot be unprotected in the event of a new cyberattack: “We all remember the great negative impact that last year’s incident had, it is our responsibility to ensure that this does not happen again.”
As mentioned above, the city of Baltimore contracted this policy after suffering a devastating ransomware attack that blocked hundreds of computer equipment and impacted the email accounts of all employees in the city. Those responsible for the attack used the Robbinhood ransomware variant, demanding payment of a ransom in Bitcoin in exchange for restoring access to the affected systems.
Since the Baltimore government refused to pay the ransom, its IT teams began an arduous recovery process that generated expenses of nearly $20 million directly, in addition to other expenses. Unfortunately, the process was not entirely successful and the city lost a considerable amount of information that had not been backed up, so they began to analyze other possibilities.
By hiring this insurance, the government not only prevents the loss of millions of dollars as a result of an attack, but will also have the help of the most renowned specialists, which in the medium and long term will help consolidate comprehensive protection of its systems.