OFAC Cyber Ransom Guidance Has Insurance Implications

Law360 (November 16, 2020, 5:14 PM EST) -- The U.S. Department of the Treasury's Office of Foreign Assets Control issued an advisory in early October reiterating that it considers the payment of ransom to certain cyber actors to be a violation of law, exposing the payer to civil penalties.[1]

That advisory, which OFAC expressly states applies to cyberinsurance companies, digital forensic and incident response companies, and financial services companies that process ransom payments, is likely to lead to cyberinsurers delaying their coverage determinations until such time as they may adequately investigate whether the threat actor is on an OFAC sanctions list and whether the ransom payment may violate the...

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