Ransomware continues to be a popular tool among hackers and cyber criminals. By locking users out of their own systems, these cyber criminals can extort significant payments from companies who risk losing way more money due to the interruption to their business. Traditionally, the number one target of ransomware attacks has been the healthcare industry due to the incredibly time-sensitive nature of their business. Recently however, hackers have focused their attacks on industrial businesses which is bad news for product manufacturers and physical plants.
Risk transfers are a vital aspect of any comprehensive risk management plan. Theoretically, those in the best position to avoid a risk should always bear responsibility for the risk. The real world does not work that way, unfortunately. Oftentimes, larger companies and larger contractors use risk transfers to try and push liability “downhill” – onto the backs of smaller companies with less negotiating leverage.
Indemnification clauses in commercial contracts can present a number of potential issues. When the parties to the contract do not properly think through or write out indemnification provisions to address these issues, it can lead to costly and dangerous unintended consequences. Companies need to think through exactly what they mean when they seek indemnification from a contracting party and ensure their approach to indemnification issues comports with their approach to their insurance coverage.