In a recent episode of CBS’s “The Good Wife,” the fictional law firm Florrick, Agos & Lockhart was hit with a cybersecurity threat demanding that $50,000 be paid within 72 hours or all files on the firm’s computer network would be destroyed. The firm had no external assistance in responding to the threat and, for reputational reasons, did not want outsiders learning of its data breach. Drama aside, “ransomware” is not fiction and ranks alongside more established cyberthreats for which cybersecurity insurance should be in place.
Cyberthreats are escalating, and business trade partners and consumers are insisting on safeguards for their private information. As this new form of insurance continues to develop, it is important to understand the nature of the protection needed in order to obtain appropriate coverage for cybersecurity breaches. Given how great the potential liability and damages resulting from a data breach can be, companies cannot afford to be without adequate, proper insurance.
Regulators Are Investigating Corporate Cybersecurity
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