September 25, 2021

Volume XI, Number 268

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SolarWinds Insured Losses Estimated at $90 Million

The fallout from the SolarWinds hacking incident linked to Russian threat actors has not only wreaked havoc on governmental agencies and private companies whose data are at risk following the incident, but this week, Bitsight and Kovrr released an analysis outlining the effect of the event on insurance losses that estimates the incident could cost more than $90 million when all is said and done.

The $90 million includes costs related to forensic analyses, incident response, potential regulatory fines and public relations costs. Although it has been reported that 18,000 customers of SolarWinds may have been affected by the incident, the analysis indicates that 40 specific firms were targeted in the incident, 80 percent of which are located in the U.S. It further notes that those firms were primarily federal agencies or in the information technology sector.

The analysis highlights the importance of assessing supply-chain cyber risk and how supply chain and vendor security incidents can cause direct losses that may not be easily recoverable from downstream companies. As part of the assessment, companies also may wish to determine whether insurance coverage may be available if it experiences a vendor or supply chain incident like the SolarWinds example.

Copyright © 2021 Robinson & Cole LLP. All rights reserved.National Law Review, Volume XI, Number 21
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About this Author

Linn F. Freedman, Robinson Cole Law Firm, Cybersecurity and Litigation Law Attorney, Providence
Partner

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She provides guidance on data privacy and cybersecurity compliance to a full range of public and private clients across all industries, such as construction, education, health care, insurance, manufacturing, real estate, utilities and critical infrastructure, marine, and charitable organizations. Linn is a member of the firm's Business Litigation Group and chairs its Data Privacy + Cybersecurity Team. She is also a member of the Financial Services Cyber-Compliance Team (CyFi ...

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