Baltimore Doubles Up on Cyber-Insurance Following Ransomware Attack
Five months on from a ransomware attack that brought the city to its knees, Baltimore has purchased cyber-insurance for the first time.
On May 7, Baltimore became the second US city to fall victim to a new strain of ransomware called RobbinHood. The attack took all the city's servers offline with the exception of essential services. As a result, real estate transactions were suspended, water billing was disrupted, and city employees were unable to access key documents and email.
While Baltimore's mayor, Bernard C. "Jack" Young, won praise for not paying hackers the $76,000 ransom they demanded to decrypt the files affected by the attack, the city now faces a massive recovery bill. So far, the attack is estimated to have cost the city $18m in direct costs and lost or delayed revenue, and the figure is expected to rise.
In a bid to protect itself from future threats, on Wednesday Baltimore approved not one but two cyber-insurance policies, each of which offers $10m in liability coverage and has a $1m deductible.
After a competitive bidding process involving 17 different carriers, Baltimore opted to purchase a plan from Chubb Insurance costing $500,103 in premiums and a second plan from AXA XL Insurance for $335,000. Each policy will provide the city with coverage against cyber-attacks for a period of one year.
Lester Davis, a spokesman for Mayor Young, said: "The city is going to reassess every year. They will have to go through this process again when the terms are nearing maturity."
Mayor Young said that having cyber-insurance did not dictate how Baltimore would respond to future cyber-attacks.
Asked whether the city was more likely to pay hackers now that it had coverage, Young said: "I would talk to my team and decide that way."
Frank Johnson, who was Baltimore's chief information officer at the time of the attack, stepped down permanently from the role earlier this month after being placed on unpaid leave in September. Todd Carter, who was acting as interim CIO for the city, has now taken on the CIO position full time.
Source: Information Security Magazine