Insurance Ruling Handles Ransomware Coverage Logically

Law360 (February 12, 2020, 4:55 PM EST) -- In one of the first court rulings to address this issue, U.S. District Judge Stephanie A. Gallagher of the U.S. District Court for the District of Maryland recently held that a business owner’s insurance policy covered a ransomware attack on the policyholder’s computer system that resulted in system slowdown and loss of data.

The court’s well-reasoned analysis demonstrates that coverage for cyberrisks can be found in traditional insurance contracts, not just specialized cyber policies, depending upon the policy’s terms, provisions and conditions.

In National Ink and Stitch LLC v. State Auto Property and Casualty Insurance Company,[1] the plaintiff policyholder (an embroidery...

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