[BreachExchange] City approves $5M more for ongoing cyberattack remediation

Destry Winant destry at riskbasedsecurity.com
Thu Aug 29 01:14:08 EDT 2019


Baltimore City's spending panel voted Wednesday to spend another $5
million to help cover the cost of repairs following a May ransomware
attack on the city's computer network.

Already $5.3 million has been spent on professional services and
equipment to address the breach, which the city's budget office has
estimated will cost around $18 million in total.

The May 7 hack gummed up city operations such as permitting and real
estate settlement deals, locked city employees out of their email
accounts for weeks and shut down the Department of Public Works' water
billing system for three months. Billing was recently resumed in early

Hackers had demanded the city hand over tens of thousands of dollars
in Bitcoin to unlock city systems, but on the advice of the FBI, the
city opted not to. The FBI is now investigating the breach.

Funds approved on Wednesday range in size from $200,000 to $2.7
million and are listed as being for "cyber-attack remediation and
hardening of the environment."

Two other items totaling $1.25 million were also approved for the
city's Office of Information Technology Wednesday. They were listed in
the weekly agenda as $1 million for an email system upgrade and
$250,000 for an assessment of and plan to diversify a city data
center. It is unclear if these expenses are related to tightening the
security of the city's cyber network following the attack.

Representatives of the city's IT department could not be reached for
comment Wednesday.

The estimated $18.2 million total of the attack is comprised of about
$10 million to be spent on recovery efforts, which was approved by the
City Council in July, and an expected $8.2 million in revenue that was
lost or delayed while systems were down.

The Board of Estimates meeting also delivered another update on
efforts to bolster Baltimore's cyber protection.



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Members of the spending panel voted to defer the purchase of cyber
insurance until Sept. 11 so that all members of the board can have
time to be briefed on the subject, according to Mayor Bernard C.
"Jack" Young.

Young said the insurance is "something that we really need," in case a
breach was to happen again, although the Mayor said he's hopeful it
will not.

The Mayor added that he thought the city, which is self-insured, would
already have had cyber insurance, but that it will going forward.

"I haven't the slightest idea why the city hasn't taken that step in
the past," he said.

If approved in two weeks, the city will spend $835,103 to purchase a
total of $20 million in cyber liability coverage from two companies.

International insurance company Chubb Insurance will provide $10
million in coverage for a cost of $500,103. Another global firm, AXA
Insurance, will provide another $10 million excess coverage at a
premium of $335,000.

Coverage includes incident response coverage with an investigative
team, coverage for business losses, digital data recovery, cyber
privacy and network security and more.

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