Ontario Court Rules $3 Million Retention Applies to Panasonic Ransomware Claim
Summary
Ontario’s Court of Appeal ruled that a $3 million retention applies to Panasonic Canada’s ransomware claim, leaving its roughly $2 million loss self-insured and dismissing its application against XL Specialty.
Key points
- An employee opened a malicious file in February 2022, allowing attackers into Panasonic Canada’s network; attackers downloaded company files and warned that data had been encrypted.
- Panasonic did not negotiate with the attackers or pay a ransom. It hired incident responders, repaired its network, replaced laptops, and incurred overtime costs.
- Panasonic sought coverage under base-policy provisions with a $1.5 million retention. XL Specialty argued that Endorsement #023 imposed a $3 million retention on ransomware-event claims.
- The parties agreed Panasonic’s claim was worth about $2 million, below the endorsement’s retention.
- The Ontario Court of Appeal held that Endorsement #023 governed ransomware claims, set aside the lower court’s declaration, and dismissed Panasonic’s application.
- The court awarded XL Specialty $21,000 in appeal costs and $88,000 for the application.
Article Details
- Victim Organization
- Panasonic Canada Inc.
- Incident Type
- Ransomware incident involving network access after an employee opened a malicious file; company files were downloaded and attackers warned that data had been encrypted.
- Incident Date
- 2022-02-01
- Data Types Exposed
- Company files; specific data types were not disclosed
- Operational Impact
- Panasonic repaired its network, replaced laptops, and paid staff overtime to respond. It sought coverage for response costs and business interruption. The court determined the approximately USD 2 million claim fell below the applicable USD 3 million retention.
- Ransom Or Extortion
- Attackers issued a message warning that data had been encrypted and offered to decrypt two files for free. Panasonic did not negotiate with the attackers or pay a ransom.
- Claim Status
- confirmed