Radiology group sues cyber insurer after policy lapsed right before ransomware attack

A North Carolina radiology group is suing its cyber insurance carrier after its coverage lapsed two days before it suffered a ransomware attack, The Wall Street Journal reported May 18.

Raleigh Radiology Associates filed the federal lawsuit April 28, alleging that the Arthur J. Gallagher agency didn't inform it that its policy had expired — even though it had submitted the required paperwork for renewal — and only found out once it tried to file the claim, according to the story.

According to the complaint, Raleigh Radiology contacted Gallagher in February 2021 when it found out its systems were infected with ransomware, but the insurer would only offer a $50,000 policy, the Journal reported. The attack reportedly cost the practice more than $1 million in recovery and lost revenue. The group is seeking damages from the insurer for costs related to the attack.

Globally, healthcare ransomware attacks rose by an estimated 750 percent between February and March of this year, the newspaper reported, citing data from cyber insurer Corvus Insurance Holdings.

"That Raleigh Radiology Associates was hit within two days of its policies lapsing underscores the unpredictable, opportunistic nature of human threat actors," Bud Broomhead, CEO of healthcare cybersecurity firm Viakoo, told the newspaper.

Gallagher declined to comment to the newspaper, while the radiology practice didn't respond to a request for comment.

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