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The Chubb entity was ordered to cover compensation for the ransomware



A federal district court has ruled against a Chubb Corp. entity, ruling that a Portland, Oregon-based beverage and sauce maker is entitled to the more than $107,000 the president repaid after he made a ransomware payment from his personal cryptocurrency funds .

Yoshida Foods International LLC purchased insurance from Chubb unit Federal Insurance Co. that included computer fraud coverage under the criminal protection portion of its policy, according to Monday’s ruling by the U.S. District Court in Portland in Yoshida Foods International LLC v. Federal Insurance Co.

In March 2021, an anonymous hacker gained unauthorized access to Yoshida’s computer system and used malware to encrypt data in its storage devices, rendering the system unusable, according to the ruling.

The hacker demanded a payment for the ransomware in cryptocurrency in exchange for each decryption program. Yoshida̵

7;s president Junki Yoshida used his personal cryptocurrency funds to pay $107,074.20 for the four decryption keys needed, for which he was later reimbursed by the company.

Federal denied coverage, arguing that the company did not suffer a “direct loss” from computer fraud, and its only loss occurred when it replaced the company’s president, who was not personally insured under the policy.

The court disagreed.

“Both the ransom payment made by Mr. Yoshida and the repayment of that amount by the Plaintiff were proximately caused by the hacker’s computer intrusion targeting the Plaintiff’s computer system,” the ruling said.

“There was no intervening event between the ransomware attacks, the ransom payment, and the repayment to Mr. Yoshida, all of which were part of an unbroken chain of events. The plaintiff’s repayment of $107,074.20 was a predictable result of the attack.”

Whether Mr. Yoshida made the ransomware payment, or whether the company reimbursed him, was “irrelevant,” the court said, as it granted Yoshida summary judgment on the matter.

Attorneys in the case did not respond to requests for comment.


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