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Understanding Bricking Coverage

Bricking is a type of cyberattack that renders a device unusable, effectively making it a “brick.” It targets hardware—disabling computers, tablets, hard drives, phones and other technological instruments. Unlike typical cyber incidents involving data theft or software disruption, bricking corrupts essential software or firmware, leaving the device permanently inoperable, even if the physical components themselves are not visibly damaged. While data loss can often be restored and software issues patched, bricking can lead to irreversible hardware failure and extended downtime. In these instances, bricking coverage is critical.

What is Bricking Coverage?

Bricking coverage is a specialized enhancement within a cyber insurance policy designed to cover the costs of replacing or restoring devices that have been rendered inoperable due to a cyberattack. Standard cyber and property insurance policies may exclude coverage for cyber-caused hardware failures, especially when there is no physical damage in the traditional sense. This creates a coverage gap that bricking endorsements are specifically designed to fill. As cyberthreats evolve, it’s increasingly crucial for organizations to review their cyber and property insurance policies to determine whether bricking coverage is included or must be added separately.

What Does Bricking Coverage Typically Include?

Bricking coverage generally includes the cost of replacing hardware that has been rendered inoperable by a cyberattack. This can involve a wide range of devices, including laptops, point-of-sale terminals, servers and other technology deemed essential to business operations. Coverage usually applies only when devices cannot be repaired or restored, meaning insureds must demonstrate permanent inoperability. In addition to the hardware itself, bricking coverage may also provide expenses related to the replacement process. This can include the cost of installation, labor for swapping out devices, and proper disposal of the damaged equipment.

Common Policy Limitations and Coverage Gaps

Cyber and property insurance policies often contain limitations and coverage gaps that can significantly impact recovery following a bricking incident. As this type of loss may be excluded from base policies, an endorsement may be needed to receive coverage. Even when bricking is covered, exclusions may apply, such as limiting coverage to certain types of attacks. Some policies only cover mass bricking events (e.g., affecting multiple devices), while others apply coverage on a per-device basis, which can affect claim outcomes. Bricking coverage is an important but often overlooked aspect of insurance, requiring careful attention to policy language and exclusions. By proactively assessing coverage needs and working closely with insurance professionals, businesses can better protect critical assets and avoid costly gaps in protection.

Weighing the Pros & Cons of Shadow IT

In today’s fast-paced digital world, employees are increasingly turning to technology solutions outside the purview of their organization’s IT department. They may use personal devices to access corporate records, personal cloud storage to share files or unapproved software to streamline workflows. While these actions are not usually malicious, using unsanctioned IT tool – commonly referred to as shadow IT – can leave organizations with significant exposures.

Shadow IT presents compelling advantages. By circumventing traditional IT channels, employees can rapidly adopt cutting-edge technology that better matches operational needs and workflows, fostering innovation. This agility empowers departments to deploy digital transformation tools without being slowed down by lengthy procurement processes, enhancing operational efficiency. Additionally, greater control over technology decisions can enhance employee satisfaction, potentially leading to improved retention – a key factor in business performance and profitability. Moreover, leveraging free or low-costs software outside conventional IT oversight, coupled with personal device practices, can deliver meaningful cost savings for individual teams and the organization they serve.

While shadow IT can streamline workflows and foster innovation, it can also introduce numerous risks. First and foremost, instances of shadow IT erode an organization’s control over its digital environment. Because IT can’t vet unsanctioned tools, these assets fall outside the scope of corporate cyber hygiene practices, such as antivirus software and threat intelligence services, increasing the likelihood of data breaches and cyberattacks. Compounding the risk, employees often configure these tools with weak credentials, leaving them vulnerable to exploitation. Shadow IT also poses a serious threat to data integrity and accessibility. Sensitive data can be stored, transmitted or shared through unprotected channels, increasing the risk of data leaks. Further, data stored in personal or unsanctioned accounts may become inaccessible if an employee leaves the organization, disrupting operations. While shadow IT often stems from employees’ pursuit of efficiency and advancement, it can expose organizations to various risks. However, by recognizing and responding to both its advantages and pitfalls, organizations can effectively manage unsanctioned technology use without stifling the innovation and evolving needs of their teams.

Common Reasons Cyber Insurance Applications Are Denied

Cyber insurance policies involve a complex application process that can be overwhelming for even the most sophisticated organizations. As such, companies that enter this process without conducting their due diligence may end up having their coverage applications denied.

Denied applications can leave organizations without adequate cyber coverage amid costly incidents, resulting in substantial losses and prolonged financial hardship. In severe cases, companies may be unable to recover from such losses, forcing them out of business.

Here are some of the most common reasons why cyber insurance applications are denied:

• Inadequate cybersecurity testing procedures and audits
• Substandard processes for staying current on software updates and patches
• Insufficient cyber incident response plans
• Poor data backup protocols and recovery methods
• Ineffective policies for ensuring ample cybersecurity measures among supply chain members (e.g., vendors and businesspartners)
• Low-quality or outdated technology and employee training practices
• Lackluster procedures for maintaining compliance with applicable data privacy laws and published security standards

With this in mind, it’s vital for organizations to address these factors and ensure they have proper cybersecurity policies and procedures in place when applying for coverage. Contact us today for additional risk management resources and insurance solutions.

Source: www.hilbgroup.com

This Cyber Risks & Liabilities newsletter is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2025 Zywave, Inc. All rights reserved.