As cyberattacks rise, so do local governments' insurance bill

The Willner, Texas, library in 2019. (AP/Tony Gutierrez)

Many local and state governments are "discovering their cyber-insurance premiums have skyrocketed and that they must meet stricter guidelines if they want to get coverage or renew their policies," Jenni Bergal reports for Stateline.

“Cyber insurance used to be very cheap, but things have changed” Alan Shark, executive director of the CompTIA Public Technology Institute, a Washington, D.C.-based nonprofit that provides consulting services to local governments, told Bergal. “Insurance companies are increasing rates dramatically and raising the bar and making it harder to get insurance. Some local governments may no longer be able to get it.”

Bergal reports, "Insurance industry officials say the higher premiums for both public and private organizations are a result of rising demand for coverage amid more frequent and costly cybercrime incidents — often ransomware attacks. That means insurers have had to pay out more, which has led them to raise premiums and tighten standards for getting a policy. Some companies also have lowered caps on coverage or limited how many policies they write."

Bergal notes, "In the past several years, there has been a rash of ransomware attacks on cities, county governments, school districts, police agencies and health care systems. Local governments, especially smaller ones, can be easy prey because they may have fewer resources and staff with cybersecurity expertise. In 2021, there were at least 77 successful attacks on local and state governments and another 88 on school districts, colleges and universities, according to Brett Callow, a threat analyst for cybersecurity company, Emsisoft. This year, as of late June, there were at least 28 attacks on governments and 33 on schools."