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Insurance company served with a lawsuit for ignoring Bitcoin ransom payment

INSURANCE
TL;DR Breakdown
  • British Jeweler, Graff, is suing its insurer, The Travelers Companies, for refusing to cover a ransom bitcoin payment.
  • Graff said the hackers threatened to leak sensitive client information.
  • The jeweler is seeking to recoup the costs of the ransom payment and legal fees.

Graff, a luxury jeweler, is suing its insurance company for declining to pay Bitcoin ransom. The jeweler reportedly paid a Bitcoin ransom of $7.5 million to the Russian hacking gang Conti after the group threatened to leak data of the company’s big clients, including Middle East royalty. Graff negotiated the ransom payment with the hackers and then paid it in full. However, its insurer, The Travelers Company, refused to reimburse the jeweler for the payment, citing that their policy does not cover Bitcoin ransom payments.

Graff is now suing The Travelers Company, arguing that the insurance company should have known about the risks associated with Bitcoin and advised them accordingly.

Conti reportedly said they intended to publish as much Graff’s information as possible. For example, the group said they had details on the financial declarations made by the US-UK-EU neo-liberal plutocracy, which engages in obnoxiously expensive purchases when their nations are crumbling under economic duress.

Graff could not put the company in such a compromising position. Thus the jeweler decided to pay for the ransom. While authorities have discouraged individuals and businesses from making ransom payments, there are circumstances where paying them is beneficial. In this case, it prevented the hackers from publishing private client information, which could have been very damaging to Graff’s business.

Paying cyber extortion demands in cryptocurrency

While most insurance policies do not currently cover Bitcoin ransom payments, some insurers offer cyber insurance policies that cover crypto ransom payments. As Bitcoin and other cryptocurrencies become more popular, more insurance companies will likely start offering coverage for Bitcoin ransom payments.

However, experts have warned that insurers may be hesitant to do so because of the volatile nature of Bitcoin. The value of Bitcoin can fluctuate wildly, making it difficult for insurers to calculate the risk.

The Graff case highlights the importance of having comprehensive insurance coverage. While most policies may not currently cover Bitcoin ransom payments, that could change in the future. Therefore, it’s important to understand what your policy does and does not cover so you can make informed decisions about your coverage.

There may change in the future as cryptocurrency becomes more mainstream. As a result, insurance companies must adapt to the changing times and update their policies to cover Bitcoin ransom payments. In the meantime, businesses should be aware of the risks associated with Bitcoin and take steps to protect themselves accordingly.

Bitcoin ransom payment should be made only as a last resort after all other options have been exhausted. However, in some cases, it may be the best option to limit the damages caused by a cyber attack.

Can insurance companies cover Bitcoin ransom payment?

When deciding whether or not to pay a Bitcoin ransom, businesses should consider the potential risks and rewards of doing so. They should also consult with their insurance providers to ensure that they are fully covered in case of a ransomware attack.

Bitcoin ransom payments have become an increasingly common way for hackers to extort businesses. Unfortunately, in many cases, insurance companies will not cover these types of payments. This is because they are considered high-risk and often lead to further losses for the business. Still, insurance companies must be prepared to cover these types of payments in the future as crypto becomes mainstream.

According to Graff, the criminals threatened to publish the customers’ private purchases; thus, they had to act to neutralize the risks. It is not yet clear how the case between Graff and the insurance will play out, but it could have major implications for Bitcoin and ransomware payments in the future.

Nellius Irene

Nellius Irene

Nellius Irene is a cryptocurrency investor and journalist who has been in the nascent space since 2018. She has researched and written on several crypto-related topics including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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