Shock Absorbers

Cyberinsurance offers some protection from hackers—and consumer lawsuits

When 21-year-old Web entrepreneur Alex Tew received a $50,000 ransom demand last month, he remembers thinking, "There's no way on earth I'm paying these guys." Hackers had kidnapped Tew's Million Dollar Homepage, an advertising website, crippling it with a flood of data. Thousands of dollars, six days and two security teams later, the site was back up. "I can understand why gambling sites that accept thousands of dollars a day could choose to pay and be done with it," Tew says, "but I made a point of standing firm."

As cyberextortion schemes become increasingly common, their targets have another choice: cyberinsurance....

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