How Bricking Coverage Works in Cyber Insurance Coverage for bricking is generally offered as an endorsement or add-on to a cyber liability policy. This enhancement is designed to cover financial losses if devices become permanently inoperable due to malicious software corruption, rather than physical damage. Because this coverage is specialized, it may require additional premiums and negotiations. When properly structured, bricking coverage may reimburse replacement costs for servers, laptops, point-of-sale terminals and other critical hardware. It may also cover related expenses, such as installation of replacement devices, labor to reconfigure systems and disposal of damaged equipment. In some cases, bricking coverage may even help with technical assessment costs in order to confirm the bricking event and document that restoration was impossible. However, coverage generally applies only when devices are confirmed to be permanently inoperable and cannot be restored through software repair, firmware reinstallation or other remediation. Insurance carriers often require thorough documentation, including a technical report confirming firmware corruption, before a claim can be filed. Industries Most Vulnerable to Bricking Attacks Sectors that rely heavily on specialized hardware are particularly vulnerable, including: • Health care providers: Sophisticated medical devices and electronic health record systems rely on embedded software. A bricking attack could disrupt patient care or data access that is essential for the daily operation of medical offices, and health care organizations are prime targets for cyberattacks. • Financial institutions: ATMs, transaction processing systems, trading platforms and security hardware often rely on firmware that could be compromised in a cyberattack. • Manufacturers: Production lines that utilize industrial control systems, automation equipment or computerized monitoring systems may face severe downtime and expensive replacements. • Retail businesses: Point-of-sale devices, payment terminals and inventory management systems are common targets when many endpoints share similar configurations. • Technology firms: Companies developing, manufacturing or configuring hardware and Internet of Things (IoT) devices could face both direct losses and liability if their equipment becomes a target. Common Coverage Limitations and Exclusions While policy terms will vary, bricking coverage often includes several restrictions, the most common of which include: • Devices must be proven to be permanently inoperable due to malicious activity — not wear and tear, a manufacturing flaw or a software bug. • Policies may include sub-limits by device type or cap total coverage for a single incident. For example, a policy might provide $100,000 in total bricking coverage but limit claims for individual devices to $25,000 or restrict coverage for certain types of equipment. High-value equipment may exceed per-device caps, which could leave organizations to cover the excess costs. • Waiting periods may apply. Some policies do not cover bricking events that occur shortly after policy inception. Others may require a waiting period between the incident and claim eligibility. • Some policies only trigger coverage when multiple devices are affected. Because of these factors, it’s essential for businesses to read policy language carefully, understand applicable exclusions and secure policy limits that reflect their exposures. Review your policies with your insurance broker to help ensure that you have adequate coverage. How Higginbotham Can Help At Higginbotham, we recognize that cyber threats evolve quickly, and policies that seemed adequate a few years ago may no longer address today’s risks. We work closely with businesses to understand their operations, assess their exposure to risks and secure appropriate insurance coverage. If you are uncertain about your current coverage or simply want to make sure your organization is protected against the full range of cyber threats, connect with one of Higginbotham’s business insurance specialists today by scanning the QR code. https://www.higginbotham.com/business-insurance/ request-a-quote/ WWW.KYADA.COM 19
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