Jonathan LA Phillips, Attorney at Law
Illinois IP Attorney


Recent developments & updates

Insurance carriers rejecting cyber insurance claims

Many of my clients are internet-based companies. To protect themselves against consumer complaints about cyber-attacks or damages resulting from impacted operations, they carry special insurance policies. Companies purchase so-called cyber insurance to protect companies for hacking incidents or other data breaches. This insurance is not cheap and many blindly rely on it.

In 2017, several companies were attacked in the “NotPetya cyberstrike.” One victim was the owner of Cadbury chocolate, Ritz crackers, Oreos, and Philadelphia cream cheese. By the time it fixed its logistics, it suffered more than $100,000,000 in damages. Merck pharmaceuticals was also hit, suffering $700,000,000 in damages.

Have you ever read an insurance contract? Ever notice the part where the insurance company says it will not pay for acts of terrorism or war? Did you shrug that off? Well, that war-exclusion has suddenly become relevant. The United States blamed the Russian government for the attack. So, Zurich insurance (among others) denied the claim. The insurance companies assert that this was an act of cyber-war.

Of course, this is now in the court system. But it behooves everyone to consider the degree they are protected by insurance for cyber-attacks. Meanwhile, we will keep an eye on the court cases about this issue.