Does Cyber Insurance Cover Ransom Payments?

A ransom payment is only one possible expense during an extortion event; a policy may cover negotiation services or incident response without reimbursing the amount paid. The FTC tells businesses to check whether their policy helps pay ransom demands, and Chubb describes extortion payments in its cyber product. These are examples of coverage that may be offered, not a promise that every ransom demand qualifies.

Before paying, check the extortion definition, consent requirement, payment sublimit, retention, coinsurance, and any conditions for using an approved negotiator. Review sanctions and other legal restrictions with qualified counsel, since the policy cannot override applicable law. Confirm whether the contract distinguishes extortion payments from stolen money or cryptocurrency theft, and whether the insurer must authorize the payment in advance. A payment also does not guarantee restored files.