Ransomware Hackers Abound! Does Cyber Insurance Cover Ransomware?

More and more SMBs must face the question: Is Cyber Insurance worth it? Since the start of the pandemic, data breaches have skyrocketed, and companies have been forced to weigh the cost of cyber insurance vs. the cost of the consequences of a cyberattack. Unfortunately, with cybercrime escalating at such an unprecedented rate and ransomware being an increasingly popular attack approach, the cost of cyber insurance has also gone up.

Is Cyber Insurance Worth It?

To determine whether cyber insurance is right for your company, you must first understand the costs of a data breach. Understanding the costs and consequences of cyberattacks is particularly important for small to midsized businesses. Unfortunately, SMBs are considered less prepared and more vulnerable and are, therefore, preferred targets to hackers. The sad reality is that almost 70% of cybercrime is perpetrated on smaller businesses.

The costs of a cyberattack vary depending on the type of event. Here’s a shortlist of the average costs of possible consequences of an attack on an SMB:

• Viruses and Malware - $60,000-$100,000
• Device Losses - $85,000 -$100,000
• Cost of IT Experts to Resolve Attacks - $20,000 - $50,000
• Lost Business and Public Relations Follow-up - $20,000 and up

Many SMBs wait until they’ve been attacked before hiring IT experts. The problem with that approach is that beyond the cost of restoring the system during the immediate attack, other costs might continue to accrue long after the data breach. Without adequate cyber security and cyber insurance, many small businesses go bankrupt.

The increased incidence of ransomware attacks has prompted insurance companies to take a long, hard look at their liability exposure. For example, the FBI www.fbi.gov reported that in 2020, “The Internet Crime Complaint Center (IC3) received 791,790 complaints, with reported financial losses of $4.2 billion. Of these, 2,474 were identified as ransomware complaints with adjusted losses of more than $29 million. This is an eight-fold increase from 2018.” As a result, insurance carriers have cut back on coverage of ransomware attacks and have set pay-out limits to control their liability. Also, while the coverage limits shrink, cyber insurance premium costs continue to rise.

Many small to midsized companies cannot withstand a ransomware attack, and cyber insurance costs are daunting. However, robust cyber threat protection, including ransomware protection, can reduce the chance of a ransomware attack and many other data breaches. Cyber security requires a 360-degree infrastructure, including constant monitoring and scanning of your system. It also requires staying current with up-to-date system software and other essential updates. Often, many of those updates include important security fixes addressed by the developers. However, built-in factory default security is no longer sufficient in our expanded remote work environment. Hiring IT professionals to analyze your system, evaluate your cyber risks and recommend ways to lock down your network and its devices is a great way to minimize or eliminate the cost of cyber insurance.

Strong cyber security incident procedures in response to a ransomware attack should include:

• Early Detection and Analysis of the Ransomware Event – Early detection mitigates or eliminates consequences.
• Isolation and Containment of the Attack – Quarantining can effectively reduce the severity of attacks.
• Eradication of the Ransomware – Of course. However, it is good to employ IT professionals to ensure your system is clear of active threats.
• Identification of and Strengthening Against Cyber Vulnerabilities – IT experts can provide cyber risk analyses to prevent future attacks.
• Recovery and Restoration of Lost Data – Your data is your business. If recovery is not possible, having clean, regular backups can preserve your hard-earned business data.
• Development of Company-wide Cyber Security Best Practices – Your network is only as strong as its “weakest link.” Therefore, from the top down, all employee users must be on the same page for ways in which they must help protect the security of your company’s network.
• Determination of Client Exposure, if any – The repercussions of any cyber attack can continue long after the cybercrime has been stopped. As a result, high-compliance businesses such as medical practices and law firms must be particularly careful with protecting their clients’ private information.
• Incorporation of Event Experience into Better Future Protection – If SMBs don’t learn from being hacked, they will likely be the target of other attacks in the future.

DIGIGUARD Cyber Security specializes in cyber threat protection, including ransomware prevention, for small and midsized companies. In addition, DIGIGUARD can provide your small business with layers of security, making it more difficult for hackers to access your network. Therefore, your company’s data will be safer and less likely to be breached in the face of our expanding mobile work environment. But, of course, the best defense against a ransomware attack is never to have one. Toward that goal, solid prevention and monitoring, in tandem with swift mitigating responses, can keep your SMB operating while recovering from a cyberattack.

As you build your business, expand its network and add more devices such as smart controls, wireless access and remote access, your network vulnerability continues to increase with your growing cybercrime attack target landscape. DIGIGUARD specializes in proactive ransomware services and has a wide array of solutions for small and midsized businesses to defend against malware attacks and other network data breaches. In addition, they are cyber security experts who can ensure your confidential business and banking data has the best protection possible. Also, they can help you defend against or recover from a ransomware attack and provide solutions that offer early detection of potential cyber threats before they happen. Furthermore, DIGIGUARD can assess your cyber vulnerability and work with you to ensure you have the best network and data protection solutions for your business.

Contact DIGIGUARD CYBER SECURITY at 833-33-CYBER (833-332-9237) or visit www.DIGIGUARDsecurity.com to explore prevention strategies available to guard against ransomware attacks and other cyber defense protocols they can provide to protect your company’s data.