A Cyber Insurance Backstop

In the first week of January, the pharmaceutical giant Merck quietly settled its years-long lawsuit over whether or not its property and casualty insurers would cover a $700 million claim filed after the devastating NotPetya cyberattack in 2017. The malware ultimately infected more than 40,000 of Merck’s computers, which significantly disrupted the company’s drug and vaccine production. After Merck filed its $700 million claim, the pharmaceutical giant’s insurers argued that they were not required to cover the malware’s damage because the cyberattack was widely attributed to the Russian government and therefore was excluded from standard property and casualty insurance coverage as a “hostile or warlike act.”…