Cyber Extortion Coverage
Definition. Cyber Extortion Coverage is a component of Cyber Liability insurance that pays for ransom demands, negotiator fees, and related costs when a business is targeted by ransomware or other extortion-based cyber attacks.
Also known as: Ransomware Coverage, Extortion Coverage
A specific coverage line within broader Cyber Liability policies. Typically reimburses the insured for:
- Ransomware payments (where legally permissible)
- Fees of expert negotiators and cryptocurrency facilitators
- Forensic investigation to determine the scope of compromise
- Costs to restore data and systems
Carriers increasingly impose sub-limits on Cyber Extortion coverage and may require multi-factor authentication, endpoint detection, and backup verification as preconditions for full limits. Regulatory treatment of ransom payments varies by jurisdiction and may interact with OFAC sanctions rules.
Example
A medical-billing service has its file server encrypted by ransomware. Cyber Extortion coverage pays the negotiator fee, the ransom (if approved), and forensic-recovery costs.
Sources cited
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📘 Educational content only.
Reviewed by California-licensed Property & Casualty insurance agent
Jason Wootton (CA License #0I94454). Not insurance advice, an individual recommendation, or a solicitation in any state. Insurance regulations vary by state. For specific coverage decisions, consult a licensed insurance agent in your state.
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