French Law Authorizes Insurability Of "Cyber-Ransoms" Paid By Victims, Subject To Prompt Filing Of Complaint

• Published date: 01 March 2023
• Subject Matter: Insurance, Insurance Laws and Products
• Law Firm: Jones Day
• Author: Mr Tyrone Childress, Theodore Chung, Lisa M. Ropple, Ozan Akyurek, Bénédicte Graulle, Olivier Haas, Jérémy Attali and Yanis Rahim

France's Orientation and Programming Law of the Ministry of the Interior ("LOMPI law"), published in the Official Journal of January 25, 2023, amends the insurance coverage of losses and damages paid in response to cyberattacks and confirm in principle the insurability of cyber-ransoms, but strictly subject to the requirement of prompt notification.

According to the law's sponsor, no member country of the Organization for Economic Co-operation and Development has "taken measures to prohibit the payment of such cyber- ransoms, nor prohibited the principle of their insurance coverage."

New article L. 12-10-1 of the Insurance Code provides: "The payment of a sum pursuant to an insurance contract clause covering compensation of an insured for losses and damages caused by an attack on automated data processing system [per Articles 323-1 to 323-3-1 of the Criminal Code] is subject to the filing of a complaint by the victim with the competent authorities no later than 72 hours after the victim becomes aware of the attack." (emphasis added.)

This article will come into force on April 24, 2023.

To be compensated under their cybersecurity insurance contracts, victims will have 72 hours, from the moment they realize that an attack on an automated data processing system has occurred (and not from its commission), to file a complaint with the "competent authorities" (judicial and police authorities, according to the report accompanying the law). This time constraint is intended to speed up investigations, facilitate the identification of perpetrators, and avoid the loss of funds.

This new provision applies to legal and natural persons covered by French insurance, in the...