The Pay for Play Scheme in Cyber Insurance and Implications for Ransomware Incident Response


It’s no secret ransomware incidents have emerged as a prominent threat to organizations worldwide. To mitigate potential financial losses and reputational damage, many companies have turned to cyber insurance for protection. However, a concerning trend has emerged, where certain cyber insurance companies only allow specific incident response firms to investigate ransomware incidents. This “pay for play” scheme raises ethical and practical concerns that demand attention and consideration. In this blog post, we will explore the implications of this practice on incident response and its potential impact on the cybersecurity landscape.

Understanding the Pay for Play Scheme

In the context of cyber insurance, the pay for play scheme involves insurance companies collaborating exclusively with select incident response firms when a ransomware incident occurs. This means that organizations are often restricted to using a pre-approved list of incident responders, regardless of their preferred vendor or the expertise of their internal security teams.

Ethical Concerns

  • Lack of Independence: Limiting the choice of incident response firms compromises the independence of investigations. Organizations should have the freedom to select experts they trust to handle sensitive and critical incidents.
  • Conflict of Interest: The pay for play scheme may lead to a potential conflict of interest, as some incident response companies may prioritize the interests of the insurance provider over their client’s needs.

Practical Implications

  • Expertise Limitation: Cybersecurity is a diverse field with varying levels of expertise among incident response firms. Restricting the pool of investigators may prevent organizations from accessing specialized skills tailored to their unique security challenges.
  • Delayed Response: Exclusive arrangements may cause delays in response time, as organizations may be forced to wait for the insurer’s pre-approved incident response team to become available, wasting crucial time during a ransomware incident.

Impact on the Cybersecurity Landscape

  • False Sense of Security: The pay for play scheme may create a false sense of security for organizations that believe their insurance coverage is all-encompassing. In reality, the chosen incident response team may not be the best fit for their specific needs.
  • Inhibited Incident Response Improvement: By limiting the competition and diversity of incident response providers, the industry may be hindered from evolving and improving its practices.

Transparency and Informed Decisions

  • Transparent Policies: Cyber insurance companies should be transparent about their incident response arrangements and disclose any exclusivity agreements with specific firms. This empowers organizations to make informed decisions.
  • Cyber Insurance Education: Organizations must educate themselves about the terms and conditions of their cyber insurance policies. Understanding the implications of the pay for play scheme can help them negotiate better coverage.

Ask Questions Up Front

The pay for play scheme in cyber insurance, restricting organizations to specific incident response companies, raises serious ethical and practical concerns. Independence, expertise, and timely response are vital elements in mitigating the impact of ransomware incidents. Cyber insurance providers should prioritize transparency, allowing organizations the freedom to choose the most suitable incident response partners. By fostering a competitive incident response market, the cybersecurity landscape can evolve and strengthen, better equipped to face the ever-growing threat of ransomware. Organizations must take an active role in understanding their cyber insurance policies and advocating for more open and flexible incident response options to protect their digital assets effectively.

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About Joe Sullivan 35 Articles
Joe Sullivan has worked in information security for over two decades. He holds numerous certifications and has worked in various roles during that time. Joe is a SANS instructor and senior security consultant for TrustedSec. Joe regularly contributes to SecFlux and shares some of his experiences, knowledge, and insight into current cyber events.