The Hamilton cyberattack became one of the most instructive security incidents in recent Canadian history, not because of how the city was breached, but because of what happened afterward. In February 2024, the City of Hamilton was hit by a devastating ransomware attack. Nearly 80% of the city’s digital systems were locked overnight, and attackers demanded roughly an 18.5 million dollar ransom. The headline that followed was the real lesson: the Hamilton cyberattack showed that having cyber insurance is not the same as being covered.
What happened in the Hamilton cyberattack
When the city refused to pay the ransom, it faced an estimated recovery bill in the range of 18 million dollars. Services from phone lines to transit and library systems were disrupted for an extended period. And when Hamilton turned to its cyber insurance policy to help absorb the cost, the insurer declined, arguing the city had not met key requirements written into the policy. The city was left to cover the recovery largely on its own.
How the breach happened
- An exposed, under-protected server. Attackers reached the network through an internet-facing server that lacked additional safeguards.
- Missing multi-factor authentication (MFA). MFA, a control the insurance policy required, was not consistently in place across departments despite its importance.
- Rapid lateral spread. Once inside, the attackers moved quickly to lock core systems before staff could contain the incident.
None of these failures are unusual. They are the same gaps found in many Canadian municipalities and mid-sized businesses, which is exactly why the Hamilton cyberattack is worth studying.
Why the insurance refused to pay
Cyber insurance policies increasingly include specific security requirements as conditions of coverage. The most common is mandatory MFA on remote access and privileged accounts. When an insurer can show that a required control was missing and that the gap contributed to the loss, it can invoke a policy exclusion and deny the claim. In Hamilton’s case, the absence of required MFA was central to the denial.
The uncomfortable takeaway for every organization is this: an insurance certificate provides no protection if you are not actually meeting the conditions printed inside it.
The real cost of a ransomware attack
The ransom demand is only part of the story. The true cost of an incident like the Hamilton cyberattack includes recovery and rebuilding, staff overtime, lost productivity during weeks of downtime, legal and notification expenses, and the long tail of reputational damage. For a public body, it also means eroded public trust. When insurance does not respond, every one of those costs lands directly on the budget.
Lessons for Canadian municipalities and businesses
1. Enforce MFA everywhere, and prove it
MFA on remote access, email, and privileged accounts is now table stakes. Just as important, keep records that demonstrate it is enabled, because your insurer may ask you to prove it.
2. Read your insurance requirements as a security checklist
Treat every condition in your cyber policy as a control you must implement and maintain. If the policy requires MFA, endpoint detection, or tested backups, make sure those are genuinely in place, not just promised on the application form.
3. Reduce your exposed attack surface
Internet-facing systems should be minimized, patched promptly, and protected behind strong authentication. Regular external testing helps you find the exposed server before an attacker does.
4. Segment networks and protect backups
Network segmentation slows lateral movement, and offline or immutable backups mean you can recover without paying a ransom. Backups must be tested, because untested backups fail when you need them most.
5. Have an incident response plan and a team that watches
The difference between a contained event and a citywide outage is often minutes. Around-the-clock monitoring through endpoint detection and response and a managed security team can stop an attack while it is still small.
How to make sure your insurance actually pays
Map each requirement in your policy to a control, assign an owner, and review it on a schedule. Document MFA coverage, patch status, and backup testing. Align your program to recognized guidance such as that from the Canadian Centre for Cyber Security, and keep evidence. If you cannot confidently say you meet every condition today, close those gaps before you ever need to file a claim. Organizations that also fall under PIPEDA have an added incentive, since regulators expect reasonable safeguards as well.
Frequently asked questions
Did Hamilton pay the ransom? No. The city declined to pay and instead absorbed a major recovery cost, which its insurer largely did not cover.
Why did the insurer deny the claim? Because required security controls, most notably multi-factor authentication, were not in place as the policy demanded, allowing the insurer to apply an exclusion.
How can my business avoid the same outcome? Treat your insurance requirements as mandatory controls, enforce MFA everywhere, keep tested offline backups, and ensure someone is monitoring your environment 24/7.
Talk to a Canadian cybersecurity team
Secur-IT Data Solutions is a Toronto-based managed security provider helping Canadian businesses detect, prevent, and respond to modern threats. If you want a clear picture of where you stand, we can help.
Explore our managed cybersecurity services or get in touch for a no-pressure assessment.
Krikor Tengerian is the CEO and founder of Secur-IT Data Solutions, a Toronto-based cybersecurity firm focused on helping Canadian organizations secure their infrastructure and critical systems. With over 25 years of experience across cybersecurity and IT infrastructure, he has supported organizations in hardening networks, protecting critical workloads, and aligning security controls with business and regulatory requirements.
Krikor actively shapes the direction and themes of Secur-IT’s educational content, collaborating with AI tools to structure, refine, and expand articles while providing the real-world context, use cases, and review to keep them accurate and practical for readers. He regularly shares insights on OT security, threat detection, incident response, and Canadian cybersecurity compliance to help industrial and commercial organizations better understand and reduce their cyber risk.
