Skip to main content
  • Global Regions
    • United States
    • Canada
      • en
      • fr
    • United Kingdom
    • Australia
    • Asia
    • Europe & Middle East
    • Latin America
    • China
      • en
    • Hong Kong
      • en
    • India
      • en
    • Indonesia
      • en
    • Japan
      • en
    • Malaysia
      • en
    • The Philippines
      • en
    • Singapore
      • en
    • Taiwan
      • en
    • Thailand
      • en
    • Belgium
      • en
    • Denmark
      • en
    • Finland
      • en
    • Germany
      • en
      • de
    • Ireland
      • en
    • Italy
      • en
      • it
    • Middle East
      • en
    • Netherlands
      • en
      • nl
    • Norway
      • en
      • no
    • Poland
      • en
      • pl
    • Spain
      • en
      • es
    • Sweden
      • en
      • sv
    • Argentina
      • en
      • es
      • pt
    • Brazil
      • en
      • es
      • pt
    • The Caribbean
      • en
    • Chile
      • en
      • es
    • Mexico
      • en
      • es
      • pt
    • Panama
      • en
      • es
      • pt
    • Peru
      • en
      • es
      • pt

    Additional countries served by Crawford's global network. Learn more >

  • Investors
  • Careers
  • Blog
  • Subscribe
  • Login
    • CMS Portal
    • CAT Adjuster Portal
    • VTECH
    • XactAnalysis
  • Submit a Claim
    • US Claim Submission Portal
    • Text "Claim" to 877-531-4803
  • 24/7 Hotlines
    • ClaimsAlert Hotline
    • 877-346-0300
    • Commercial Trucking Claims Hotline
    • 866-420-1689
    • Submit a Claim
    • US Claim Submission Portal
    • Text "Claim" to 877-531-4803
Crawford & Company logo
  • Services
    • Featured Services
    • Loss Adjusting
    • Large and Complex
    • Third Party Administration
    • Managed Repair
    • Medical Management
    • Alternative Inspections
    • Catastrophe Response
    • Additional Services
    • 24/7 Claims Intake
    • Accident and Health
    • Auto
    • Building Consultancy
    • Casualty / Liability
    • Contact Center
    • Contents
    • Counter Fraud
    • Cyber Risk
    • Data and Analytics
    • Directors and Officers Liability
    • Disability and Leave
    • Educational Services
    • Environmental
    • Forensic Accounting
    • Forensic Engineering
    • Global Client Development
    • Legal Services
    • OSHA Recordkeeping
    • Private Client
    • Product Recall
    • Property
    • Subrogation and Recovery
    • Temporary Housing
    • Workers Compensation
    Loss Adjusting

    When loss occurs, Crawford is there with the right team, the right technology, and the right processes to help you restore and rebuild.

    Oil rig on fire in the middle of the ocean

    Technical expertise and established partnerships to properly assess, collaborate, and resolve even the most complex claims.

    Global Third Party Administration Preview Cards 480X270

    From loss adjusting to medical management to managed repair and more, Crawford delivers effective TPA solutions to save you time and money.

    Global Managed Repair Preview Cards 480X270

    Deliver a world-class experience to your customers from first notice of loss all the way through to finished repair.

    Global Medical Management Preview Cards 480X270

    A comprehensive set of clinical management programs focused on compassionate care.

    Ais preview 480x270

    Deploying inspectors through a variety of networks to gather claims information faster and more efficiently than ever before.

    Crawford Catastrophe Services

    Industry-leading adjusters combined with innovations in technology and workforce management deliver value to clients when they need it most.

    Global Service Offering 24 7 Claims Intake Preview 480X270

    Faster claims intake means faster response — and faster response means better claimant and policyholder satisfaction... and lower claims cost.

    Global Service Offering Accident Health Affinity Preview 480X270

    With the ability to scale and customize to your specific business needs, Crawford can deliver claims handling solutions very few businesses or…

    Global Service Offering Auto Preview 480X270 V2

    Crawford’s auto services division is driven to resolve vehicle claims quickly and accurately the first time.

    Global services building consultancy preview

    A concierge-level solution for large and complex loss management through a nationwide network of expert commercial contractors.

    Global Service Offering Casualty Liability Preview 480X270

    With so many variables, casualty and liability claims can stifle productivity. Crawford blends innovation and expertise to deliver…

    Workers in a contact center responding to incoming phone calls.

    Crawford’s state-of-the-art global contact center combines the latest telephonic advances with highly trained professionals to deliver an…

    Global contents services previewcard

    Scalable for all types of losses, Crawford contents provides a turnkey recovery program to get policyholders back to life.

    Criminal using stolen credit card to commit fraud

    Crawford provides a counter fraud service that is truly unique in the marketplace from first notification of loss to the court of appeal.

    Global Service Offering Cyber Risk Preview 480X270

    Crawford’s Global Technical Services (GTS) group specializes in responding to and mitigating the damage from cyber-related events.

    Globalservice Offering Data Analytics Preview 480X270

    With an industry-leading analytical approach, Crawford can reduce overall claims cost and add efficiency to your claims management processes.

    Executives gathered around a conference room table

    Our team of highly experienced and multilingual adjusters, including those with legal and accounting backgrounds, manages a variety of D&O and…

    Global Service Offering Disability Leave Preview 480X270

    Crawford’s highly experienced team of professionals and comprehensive scope of services offer a great way to facilitate employee recovery and…

    Global Service Offering Educational Service Preview 480X270

    Crawford was founded on the idea that “knowledge and creativity is power” and for nearly 80 years, we’ve focused on education and training as…

    Beautiful rural country landscape

    Backed by extensive technical expertise, our adjusting and claims management service offers a fully-integrated, global solution to pollution…

    Global Service Offering Forensic Accounting Preview 480X270

    At Crawford & Company, our Global Technical Services group delivers forensic accounting expertise through its roster of specialized professionals.

    Forensic engineers working on a job site

    Our team of forensic engineers has extensive experience identifying a variety of civil and structural engineering and construction related…

    Uk Global Client Preview 480X270

    The Global Client Development team specializes in designing, implementing and managing multi-national and global claims management programs to…

    Crawford Legal Services

    Crawford Legal Services is reimagining legal solutions, offering a range of integrated and unbundled legal services both locally and globally.…

    Global service osha recordkeeping preview

    Broadspire’s integrated OSHA service offering completely offloads all of your data collection, log creation and recordability decisions.

    Global Pcs Preview 480X270

    Crawford & Company has developed premium private client services tailored to the diverse and complex requirements of our high net worth customers.

    Global Preview Recall 360 480X270

    Crawford & Company can help your business plan for, respond to, and mitigate the impact of any product recall. Designed with modular…

    Global Service Offering Property Preview 480X270

    Restoring and rebuilding foundations for businesses and individuals around the world.

    Us subrogation preview card 480x270

    Don’t let missed opportunities for a full recovery affect your bottom line. Our loss specialists will investigate, evaluate, and communicate…

    Craw temp housing preview 480 270

    When catastrophic events render a policyholder's home uninhabitable, Crawford's temporary housing services swiftly step in to provide…

    Global Service Offering Workers Compensation Preview 480X270

    Ensuring the right care for your claimants and the most efficient processes for your business.

  • Industries
    • Insurance & Risk
    • Carriers
    • Brokers
    • Corporates
    • The Lloyd's Market
    • Other Industries
    • Agriculture
    • Construction
    • Entertainment and Events
    • Finance
    • Healthcare
    • Hospitality
    • Manufacturing
    • Marine
    • Mining
    • Power and Renewable Energy
    • Public Sector
    • Real Estate
    • Retail and Wholesale
    • Transportation
    Global Insurance Carriers Previewcard

    Optimize your claims processes and delight your customers.

    Global Insurance Brokers Previewcard

    Backed by our innovative array of services, you’ll always be the hero to your clients.

    Global Corporates Previewcard

    Comprehensive solutions for businesses in any industry.

    Global Preview Card Lloyds 480X270

    Exceeding expectations for syndicates, brokers, insureds, coverholders, and MGAs.

    Uk Agriculture Preview 480X270

    Modern agribusiness is expansive and extraordinarily complex. Crawford's agriculture practice understands this and delivers needed expertise…

    Global Construction Previewcard

    For over 77 years, Crawford has solved the world’s most complex claims handling challenges, including those of our many construction industry…

    Camera man filming a scene in a doctor's office

    The media and entertainment industry has never been larger or more complex, encompassing high degrees of risk, unpredictability, and potential…

    Aerial view of city

    With dedicated specialists in cyber risk, forensic accounting, and many other specialties, in addition to its focus on regulatory compliance…

    Group of healthcare professionals meeting

    Beginning at implementation and continuing to claim resolution, Crawford and its global TPA, Broadspire, provide specialized protocols to…

    Global Hospitality Preview Cards 480X270

    Crawford's extensive capabilities and wide range of services are a perfect match for businesses in the hospitality sector. We combine over 75…

    Batteries on a conveyor built in a manufacturing facility

    At Crawford, we understand the extensive needs of manufacturers and offer a suite of services designed to support their operations and…

    Crawford Marine & Transportation

    With a dedicated, global marine team consisting of hundreds of experts, our services are comprehensive and specialized. Whatever the scale of…

    Mining equipment outdoors

    From massive landslides in an open pit mine to barricade failures causing fatalities underground, Crawford understands the unique needs of…

    Solar and wind farm

    The world of power and energy has never been more dynamic. Insurance coverage in this industry is as complex as the potentially staggering…

    Ornate columns outside a government building

    Crawford & Company supports public sector entities with innovations that increase efficiencies while offering the transparency, regulatory…

    Luxury apartment building in city

    Crawford offers dedicated, commercially-focused services for the real estate industry, placing pro-active settlement, regular communication…

    Delivery truck unloading at a commercial loading dock

    Crawford offers the depth of experience needed to solve the unique risk-related challenges facing the retail and wholesale industries.

    Global Transportaion Preview Cards 3 480X270

    When your business depends on moving, Crawford is here to keep the wheels in motion.

  • Innovation
    • Overview
    • Innovation Home
    • Explore Technologies
    • Asservio
    • Digital Desk
    • YouGoLook
    • 3D Property Scan
    • Digital Assist
    • Escape of Water
    • CoverAI
    • Renovo
    • WeGoLook
    Global innovation preview

    More than just technology: it takes proven expertise to transform how claims and risk are managed.

    Global innovation asservio preview

    Asservio is Crawford’s leading-edge estimate review technology that eliminates friction and ensures faster, more accurate property repair estimates.

    Digital desk preview 480x270

    Digital Desk is a one-of-a-kind, automated, single-portal claims adjusting platform packed with robust features and integrates with leading…

    Global yougolook preview 1 480x270

    Designed with policyholders in mind, YouGoLook guides users step-by-step as they capture the images and information required to document their…

    Global innovations 3d property scan previewcard

    Through a partnership with HOVER, Crawford provides customers and their policyholders exclusive access to the next generation of innovative…

    Global digital assist preview card

    Crawford Digital Assist makes available a wealth of claims handling solutions to support your desk adjusting operations.

    Global Escape Of Water

    Crawford’s Escape of Water solution combines IoT technology with proven services to deliver a rapid and reliable response at the first sign of…

    Global innovation coverai preview

    CoverAI: Revolutionizing claims management through AI innovation and empowering faster, more accurate claim coverage decisions with…

    Screenshot of Renovo Adjuster Platform

    RENOVO is Crawford's catastrophe portal, empowering our adjusters, employees and clients with leading-edge technology.

    Global Wegolook Preview Cards 480X270

    Instantly connecting claims handlers with networks of specialized, on-demand resources.

  • Expertise
  • About
    • Our Story
    • Our Locations
    • Network Providers
    • Leadership
    • Global Citizenship
    • Diversity, Equity and Inclusion
    • Careers
    • Press
    • Contact us
    Global Our Story Preview Cards 480X270 V2

    For over 80 years, our guiding principles have been embedded in Crawford’s culture, shaping the company’s ongoing commitment to putting people…

    Global Locations Preview Cards 480X270

    With hundreds of offices and service centers around the world, Crawford is everywhere you need to be.

    Circles filled with human faces scattered across a globe

    Crawford's scale and reputation allow us to build strategic relationships with true experts in their industries and their specific locales,…

    Global leadership previewcard 2 480 X270

    Meet our Executive Leadership Team and other leaders of Crawford's worldwide organization.

    Expansive roadway near to windmills

    At Crawford, we’re moving in the right direction. More than ever, we are committed to acting sustainably and responsibly by focusing on three…

    Diverse group of co-workers sitting around a conference table

    At Crawford, we're fostering a culture where diversity, equity and inclusion (DEI) are at the heart of our values and play an integral part in…

    Global Preview Careers 480X270 V2

    At Crawford, employees are empowered to grow, emboldened to act and inspired to innovate. Our industry-leading team pioneers new solutions for…

    Global Press Preview Cards 480X270

    Discover recent placements, company news and additional Crawford resources.

    Global Contact Us Preview Cards 480X270 V2

    We’re here to help! Team members around the world are standing by to assist you and your business.

  • Resources
  • Free Consultation
  • Home
  • Blog
  • Post
  • Category:
    • Company
    • Expertise
    • Innovation
    • People
    • Services
    • COVID-19
    • Legal Services

Monday, June 14, 2021

To pay or not to pay, that is the ransomware question

Blogpost 2021 q2 global cyber risk

The ongoing debate as to whether insurers are prepared to, or should, underwrite ransom payments and demands by cybercriminals continues to exercise the market. The paper explores the risks attaching to this muted shift in market practice, with specific reference to the potential impact on cyber BI claims and the ability to mitigate overall exposure.

In the GB Cyber Market Conditions Report 2021, the cyber-related business interruption was the coverage that buyers were most interested in purchasing at 68%. Cyber extortion/ransom was second in this list at 61%. The correlation between these two heads of cover is well known with disruption to operational activity now being a core modus operandi for threat actor whether that be through decryption, DDOS or stealing of data and/or intellectual property.

Some commentators have already expressed an opinion that the current “normal” coverage whereby insurers provide cover for ransom payment provides a platform for threat actor activity as the insured has little to lose by paying a ransom quickly. The risk is transferred and if they are fortunate and the decryption keys supplied by the criminals restores data and files quickly, then they and insurers gain by mitigating any BI loss. Clearly, even under the current coverage, insurers and the insured must satisfy themselves that paying the ransom makes economic sense (no point in paying a $3m ransom to reduce BI costs by $1m) but even if the initial ransom demand is not economically viable, this can often be negotiated down by professional negotiators to create a scenario whereby the payment may be economically justified.

The risk attaching to no longer covering the ransom payment will be that in, practice, it will be difficult, if not impossible, for the insurer to have any direct input into whether or not the ransom should be paid, as if specifically excluded this now represents an uninsured loss. Consequently the insured will want to base the decision on whether or not to pay the ransom on business case alone, which may place the insurer and the insured at odds. Let’s look at a worked example to see how this might play out.

ABC Ltd (the insured) suffers a cyber-attack and has a three-month maximum indemnity period. Hackers have demanded £1m for a decryption key.

The insured estimates that their BI loss will amount to £ 2m if they pay for the decryption key and are able to quickly restore their files and relevant data. If no ransom is paid they estimate their BI loss will be £4m as it will take longer to restore files and data. Under the current status quo, the ransom would be paid by insurers and insurers’ total liability will be £3m (£2m BI + £1m ransom) as opposed to £4m if no ransom is paid.

If the insured is responsible for the ransom payment/cost per a specific exclusion, would they be contractually or legally obliged to pay the ransom? From their point of view, there is little point in paying the ransom as the increased BI costs arising from not paying the ransom will be the liability of insurers. If the insured pays the £1m ransom they will potentially be out of pocket by £1m. In such a scenario, insurers would clearly want the ransom to be paid as their liability for the BI loss reduces from £4m to £2m. Could insurers use the argument that the insured has a duty to mitigate their loss and thus are required to pay the ransom? One can certainly see this argument being used but of course, real-life bears little similarity to worked examples. The truth is that in the early aftermath of a cyber-attack, both insurers and the insured will find it difficult to estimate the potential BI loss if the ransom is paid/unpaid so it would be totally understandable for an insured to inform insurers that they don’t believe payment of the ransom is economically justified, decide not to pay it, and then find several months later that the eventual BI loss is far greater than initially estimated.

A corollary of this is that the early involvement of forensic accountants to estimate potential BI exposure under various payment and non-payment scenarios becomes crucial. There may of course be other reasons for non-payment of the ransom aligned to the threat actor profile, sanctions checks or moral concerns. Research has also shown that companies who do pay a ransom are often attacked again at a later date as cybercriminals are now aware that they are a soft target or “payers”.

Given the above, it seems probable that an insured will only be keen to pay a ransom where the BI loss outside the indemnity period (and consequently uninsured) is estimated to be reduced by an amount exceeding the ransom payment. It therefore seems certain that the exclusion of ransom payments by insurers may create a situation in which an insured is unwilling to pay a ransom even though payment will substantially reduce the liability of insurers. One questions whether, ultimately, insurers will be obliged to make a “contribution” towards a ransom payment where they are the principal beneficiary even though this is specifically precluded by the policy.

There is of course a precedent for such an arrangement. In the food industry, supermarket suppliers who are unable to fulfil orders due to an insured event, such as a fire, are often hit with large “penalties” by the relevant supermarket chain. These are to compensate the supermarket for having “empty spaces” on shelves and allegedly losing sales although in reality alternative suppliers are often given a trial in such situations. Although there is usually no legal or contractual obligation to pay such a “penalty”, payment is often made to safeguard the future relationship with the supermarket. As penalties are almost always specifically excluded in most BI policies, insurers have no reason to indemnify the insured for such a payment. However, in practice, insurers often make a substantial contribution to the payment of such penalties as their own BI exposure will be significantly reduced by such payment. It remains to be seen if the exclusion of ransom payments will result in a similar sort of arrangement between insurers and the insured being arrived at.

A further possible consequence of such a move by an individual insurer is that cybercriminals will merely focus on companies whose cyber insurance policies cover the ransom payment. Cybercriminals unfortunately often gain knowledge of their target’s insurance policy so this would not be a difficult step for them to take.

In conclusion, this is clearly an innovative and positive step in the fight against cyber-crime, but it may give rise to some unintended consequences which will need to be carefully monitored and managed to avoid a potential increase in Business Interruption exposure.

To find out more about Crawford’s cyber expertise visit https://www.crawco.com/services/cyber-risk

Related posts

Blog us cyber advice ms exchange 2000x1000

Wednesday, March 10, 2021

Cyber Advice: Microsoft Exchange server attack / zero-day exploits

Read more about Cyber Advice: Microsoft Exchange server attack / zero-day exploits
Blog post covi 19 telecommuting 1000x500

Tuesday, March 31, 2020

Covid-19 : Remote working poses an elevated cyber threat

Read more about Covid-19 : Remote working poses an elevated cyber threat
Blog us cyber risk 2000x1000

Wednesday, March 24, 2021

Business operations all have one thing in common — they are all at risk of a cyber breach.

Read more about Business operations all have one thing in common — they are all at risk of a cyber breach.

Crawford & Company logo

Services

  • Loss Adjusting
  • Large and Complex
  • Third Party Administration
  • Managed Repair
  • Medical Management
  • Alternative Inspections
  • Catastrophe Response
  • Full Service Catalog

Industries

  • For Carriers
  • For Brokers
  • For Corporates
  • For the Lloyd's Market
  • See More Industries

About

  • Our Story
  • Our Locations
  • Leadership
  • Global Citizenship
  • Careers
  • Press
  • Blog
  • Contact

Legal

  • Terms of Use
  • Privacy Notice
  • CA + US States Privacy
  • Cookie Policy
  • Employment Policy
©2025 CRAWFORD & COMPANY. All Rights Reserved.
  • Home
  • Services
    • Featured Services
    • Loss Adjusting
    • Large and Complex
    • Third Party Administration
    • Managed Repair
    • Medical Management
    • Alternative Inspections
    • Catastrophe Response
    • Additional Services
    • 24/7 Claims Intake
    • Accident and Health
    • Auto
    • Building Consultancy
    • Casualty / Liability
    • Contact Center
    • Contents
    • Counter Fraud
    • Cyber Risk
    • Data and Analytics
    • Directors and Officers Liability
    • Disability and Leave
    • Educational Services
    • Environmental
    • Forensic Accounting
    • Forensic Engineering
    • Global Client Development
    • Legal Services
    • OSHA Recordkeeping
    • Private Client
    • Product Recall
    • Property
    • Subrogation and Recovery
    • Temporary Housing
    • Workers Compensation
  • Industries
    • Insurance & Risk
    • Carriers
    • Brokers
    • Corporates
    • The Lloyd's Market
    • Other Industries
    • Agriculture
    • Construction
    • Entertainment and Events
    • Finance
    • Healthcare
    • Hospitality
    • Manufacturing
    • Marine
    • Mining
    • Power and Renewable Energy
    • Public Sector
    • Real Estate
    • Retail and Wholesale
    • Transportation
  • Innovation
    • Overview
    • Innovation Home
    • Explore Technologies
    • Asservio
    • YouGoLook
    • Escape of Water
    • 3D Property Scan
    • Digital Assist
    • Digital Desk
    • CoverAI
    • Renovo
    • WeGoLook
  • Expertise
  • About
    • Our Story
    • Our Locations
    • Leadership
    • Global Citizenship
    • Careers
    • Press
    • Contact us
    • Network Providers
    • Diversity, Equity and Inclusion
  • Resources
  • More from Crawford
  • Investors
  • Careers
  • Blog
  • Subscribe
  • Login
    • CMS Portal
    • CAT Adjuster Portal
    • VTECH
    • XactAnalysis
  • Submit a Claim
    • US Claim Submission Portal
    • Text "Claim" to 877-531-4803
  • 24/7 Hotlines
    • ClaimsAlert Hotline
    • 877-346-0300
    • Commercial Trucking Claims Hotline
    • 866-420-1689
    • Submit a Claim
    • US Claim Submission Portal
    • Text "Claim" to 877-531-4803
  • Search for Expertise
  • Location
  • Global Regions
    • United States
    • Canada en fr
    • United Kingdom
    • Australia
    • Asia
      • China
      • Hong Kong
      • India
      • Indonesia
      • Japan
      • Malaysia
      • The Philippines
      • Singapore
      • Taiwan
      • Thailand
      • Additional countries served by Crawford's global network. Learn more >

    • Europe & Middle East
      • Belgium
      • Denmark
      • Finland
      • Germany en de
      • Ireland
      • Italy en it
      • Middle East
      • Netherlands en nl
      • Norway en no
      • Poland en pl
      • Spain en es
      • Sweden en sv
      • Additional countries served by Crawford's global network. Learn more >

    • Latin America
      • Argentina en es pt
      • Brazil en es pt
      • The Caribbean
      • Chile en es
      • Mexico en es pt
      • Panama en es pt
      • Peru en es pt
      • Additional countries served by Crawford's global network. Learn more >

    • Additional countries served by Crawford's global network. Learn more >

Interested in learning more?
Get a free consultation with one of our experts.

Complete this form and we’ll get back to you at the contact details provided.