Main Menu
Print PDF

Ransomware Victims Get New Path To Coverage In Md. Ruling

Law360 | January 27, 2020

A Maryland federal judge recently ruled that an embroidery company’s property insurance policy covers the replacement of its computer system following a ransomware attack, a first-of-its-kind decision that indicates policyholders can turn to traditional insurance to defray costs associated with hackers’ schemes.

Joshua Mooney, Partner and Co-Chair of the Cyber Law and Data Protection Group, weighed in on the federal judge's decision in an interview with Law360. 

According to Mooney, who represents insurers, the decision "missed the forest for the trees" by getting stuck on the question of whether the embroidery company's electronic data and software were tangible or intangible, when the State Auto property policy at issue doesn't even contain terms limiting coverage to tangible property. By focusing so much attention on that issue, the ruling didn't sufficiently analyze whether the root case of the embroidery company's loss — the slowdown of its computer system — was covered by the policy's plain terms, he said. 

"Under the coverage form here, inefficiencies should not be a covered cause of loss," Mooney said. 

Read the full article (subscription required).

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions.
Back to Page