Jeremy King Quoted in Law360 on CDK Global’s Ransomware Attack and Best Practices for Seeking Relief Through Cyber Insurance Policies

Chair of Olshan’s Insurance Coverage Practice Jeremy King was quoted in a Law360 article (subscription required) on the ransomware attack against auto software company CDK Global that caused an ongoing disruption in the operations of car dealerships, who use the software to manage a range of their operations, and sent policyholder experts pointing to cyber insurance policies for immediate relief. Many cyber insurance policies include some form of coverage for contingent business interruption, as when a software disruption leads to loss of income to a third party. Depending on the language of the policy, however, costs incurred by a business to work around a service interruption may also qualify for coverage, Jeremy explained: “The income that the business itself loses because of an outage is just one component of the contingent business interruption coverage, and in this day and age, it’s becoming easier to tie that directly to business losses. People recognize how interdependent companies are on their computer networks.” He added that other potential covered expenses can include the cost for hiring extra workers, extra work hours and new equipment purchases. Businesses face immediate and obvious losses because of a service disruption, but they may take longer to account for lost income and less clear costs. Jeremy recommended that policyholders always reserve rights and make clear to carriers that they are incurring other losses that are difficult to calculate. Carriers, in his experience, tend to understand that there will be an ongoing analysis: “I would emphasize clear communication about losses that you know at the time but also clear communication about the fact that you are incurring other losses that are difficult to immediately quantify, but that will be sent to the insurer as part of the claim before the entire claim is closed.”