How Cyber Insurance Protects Your Company from Ransomware Attacks

Ransomware attacks are a disruptive force for businesses and organizations across the globe from financial institutions to healthcare facilities. Sadly, one of the most common types of malware - ransomware - is on the rise and can cripple an organization causing lost income, loss of data and damage to a company’s reputation.  While we have discussed how ransomware attacks are on the rise in our blog as well as how to safeguard your business from these attacks, today our focus is on how cyber insurance can help protect your company from these types of attacks. 

VoIP

A Review of Ransomware 

According to the Federal Bureau of Investigation, “Ransomware is a type of malicious software—or malware—that prevents you from accessing your computer files, systems, or networks and demands you pay a ransom for their return.”  Most businesses don’t know that a malicious code has been loaded onto their network or devices until someone within the organization tries to access data. Instead of being able to open files and access information, they are greeted with a message letting them know about the attack and demanding ransom payments in return for access to the data.

Current Statistics on Ransomware

Ransomware is an ever-growing threat to thousands of organizations here and around the globe. In recent years, the number of attacks has actually decreased but the cost of having data or access returned has risen.  The State of Ransomware Survey, published by Sophos, indicates a slight reduction in the rate of ransomware attacks with 59% of organizations being hit, compared with 66% in 2023. However, the average ransom in 2024 is $2.73 million, almost an increase of $1 million from 2023. Given this dramatic rise in ransomware operators seeking huge payoffs, businesses should take precautions to protect data including following best practices for backups and disaster recovery plans.  Businesses should also consider investing in a cyber insurance policy that can assist in recovery both financially and operationally. 

IT support

How Does Cyber Insurance Work for Ransomware? 

Cyber insurance is aimed at protecting businesses from financial losses caused by cyberattacks and data breaches. It can also help businesses reclaim the cost associated with ransomware.  This type of liability insurance often covers financial losses, response costs and legal costs. Cyber insurance may cover the ransom payment itself, as well as expenses to recover data, repair systems, and get the business back up and running. It could also cover costs to respond to the ransomware event, including digital forensics and lost income. There are legal costs that could accumulate or help with navigating the legal and regulatory implications. If you have questions about how cyber insurance could help your business in the face of a ransomware attack or how to go about choosing the right amount of coverage, talk to our team here at Spectra Networks.