Netflix: Media Errors & Omissions and Cyber Insurances

Media Errors & Omissions and Cyber insurances: Netflix refuses to pay ransom, but what are the consequences for the post-production company?

A hacking group called the Dark OverLord group stole a large number of episodes of different television shows from a post-production company based in Los Angeles. The hackers targeted Netflix and demanded 50 bitcoins ($73,000) as a ransom for them not to release the new episodes of Netflix series ‘Orange is the New Black’. Netflix refused to pay, which seemed to hit a raw nerve with the hackers who promptly released the Netflix episodes. The hackers have since stated that they will now go on to release other episodes from up to 30 different television series.

For Netflix, not paying the threat has done more good for its reputation than if they had caved in under the pressure of a cyber extortion threat and subsequently paid the ransom. By taking the moral high ground, the hacking group appears to have come out of this situation worse off. Had Netflix decided to pay, it is likely the media would have reported on this story in a completely different way.

An important factor in this incident is that the hacking group did not steal from Netflix but from a post-production company who had their security network breached. On the back of this incident Netflix could decide to pull their contract with this company. This would have significant financial implications for their vendor. Netflix could also sue the post-production company for breach of contract and could pass on any costs associated with the breach. Netflix is likely to have strict insurance requirements for all parties involved with their distribution, including pre and post production, for this very reason.

Companies involved with Netflix or with other other companies of this nature, should take out a blended insurance product that includes Media Errors & Omission and Cyber insurance which would protect themselves against a number of risks including the above.

Safeonline is an experienced insurance broker in Cyber, Technology and Media insurance who can help companies find the right insurance products, including when it is a contractual requirement. For more information please email Henry.Sanderson@safeonline.com

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