City of Saint John settles $2 million claim with AIG over 2020 cyberattack

SAINT JOHN, NB — The City of Saint John says it’s settled one of two insurance claims related to a 2020 cyberattack and will be paid the “full-face value” of $2 million.

At its meeting Monday, Saint John council voted to accept an agreement to settle a claim on a cybersecurity insurance policy issued by AIG Insurance Company of Canada. The “full & final release & assignment agreement” was presented in a closed committee meeting earlier in the day, council heard. According to an executive summary, the agreement in favour of AIG “will result in the city receiving the full-face value of the policy,” which is said to amount to $2 million.

The City of Saint John was the subject of a wide-ranging cyberattack in November 2020 that also affected the Saint John Police Force and the city’s emergency dispatch system, Brunswick News previously reported. Russian hackers took the city’s systems hostage, demanding $17 million in bitcoin, which the city did not pay, opting instead to build the system from the ground up, according to a 2023 report.

In 2022, the city started a legal action against AIG for claims related to the cyberattack under two policies with the insurer, Brunswick News reported. At that time, costs were estimated to be $2.9 million, with insurance covering $2.5 million.

On Monday, Mayor Donna Reardon referred specific questions to the executive summary, but said she was “absolutely” happy to have the issue resolved.

“That’s a lot of money, and I think now the cost of insurance is high for cyberattack, but … that was 2020,” she said. “It’s taken a lot of work, but this is where we are with it, so it’s good.”

Stephanie Rackley-Roach, the city’s chief information officer, said Tuesday that the settlement covers the cybersecurity claim, with a claim under a property policy claim still outstanding.

“The city is continuing to work with AIG on settling the property portion of the claim under the property policy,” Rackley-Roach said in a statement.

Brunswick News made a request for comment to AIG and is yet to receive a response.

– By Andrew Bates, local journalism initiative reporter at the Telegraph-Journal — with files from Emma McPhee

Photo credit: Saint John Mayor Donna Reardon said ‘it’s taken a lot of work’ to resolve the city’s insurance claim regarding a 2020 cyberattack. Photo by Andrew Bates, Canadian Press