Broker Check

Is Your Computer System Covered for Physical Loss from Hackers?

February 06, 2020

A post on the Bank Info Security website goes beyond insurance for ransomware. A ruling by a U. S. District Court judge in Maryland found that damage to a company's computer infrastructure from a ransomware attack was "physical loss or damage" covered by their insurance policy. The company was forced to replace its entire computer network and install protective software following the attack.

The insured had a "standard" Businessowners policy with no specific coverage for cyber loss. (Author's note: While there is a standard Businessowners insurance form, insurers may use their own forms or add endorsements. When you've read one insurance policy you haven't read them all.)

Any business that relies on computers in its operations needs coverage for both direct physical loss and loss of use, whether the loss is caused by conventional perils such as fire or cyber attack not limited to ransomware. The danger is that both Property and Cyber policies may exclude or limit coverage.To guard against this possibility, do the following:

  • Review both your Property and Cyber policies for possible coverage gaps NOW; don't wait for a loss. If you don't understand the forms, ask your broker or insurance adviser for help. If they can't explain, find another broker. (Hint: at Beacon we're glad to answer all of your coverage questions.)
  • If you or your broker find gaps in coverage, request extended coverage. If necessary, find another insurer or purchase additional insurance.

If you are unsure about what your Property & Cyber policies cover, feel free to schedule a quick 10 minute call with our Property & Casualty expert, Steven Sharkey below. He will be more than happy to walk you through your policy and any questions you may have about your coverage.