Ransomware Insurance Coverage: Protection From Ransomware and Other Cyber Extortion

by Arthur Williamson

With an ever-increasing digital world, it’s nearly impossible for companies not to rely on websites, computers, and cloud technology for their business. From hospitals to investment firms, private data from employees and clients is stored online. With this much data being stored on the internet, there is a greater risk of cyberattacks. 

One of the most prominent forms hackers are using is ransomware. Protection from ransomware should be a high priority for every business that collects and stores data. Luckily, there are now more options for extortion insurance than there has ever been before.

Here’s what you need to know about how to fight ransomware:

Ransomware Defined

Ransomware involves using software to take over a computer system. The hacker essentially holds that system and all of its data for ransom. When the user or company pays the ransom, the hacker releases the computer or files. The threat could involve just locking the company out of their systems to potentially destroying the files or releasing files into the public. 

With so much personal, private, and valuable data stored on company servers, ransomware is a real threat that should be taken seriously.

How Does Ransomware Work?

Ransomware works in a number of different ways. 

The first step is that a hacker attempts to take control of your systems. Ransomware is essentially a virus that gets placed onto your computer or that gains access to your accounts. Some of the most common tactics involve phishing emails, infected websites, downloadable files, and so on. The goal is to get someone to open an e-mail or fall into some kind of online trap.

Once the hacker has access to the system, they can take over. Ransomware presents itself in a variety of ways as well. 

The most prevalent version of an attack is a lock screen that pops up and denies user access. Some attacks use file-encryption programs to keep the computer available without allowing access to certain files. The pop-up screen typically has instructions on how to pay the ransom. 

The result is most often a decryption key that acts like a password to unlock the inaccessible files.

How Does Ransomware Impact Businesses?

Businesses are the primary target for hackers looking to use ransomware. Hackers see employees as susceptible to phishing emails or other types of fraud. 

It’s easy to believe that larger businesses are easier targets because there are more employees and a greater disconnect between departments, but small companies are fair game for hackers too. These cybercriminals are really good at making their phishing attempts look legit.

A company that loses access to its core data can experience disaster. Your business essentially only has a few options on how to deal with this threat. Doing nothing or ignoring the hackers can result in losing the data permanently. 

Depending on your industry, this could be the end of your business. Some companies go ahead and pay the ransom, but take note: only about half of these payments result in files being unlocked. Once a hacker knows you will pay, there is nothing stopping them from asking for more.

Ransomware Policy: How to Fight Ransomware Before It’s a Problem

There are a few steps that businesses should take to help mitigate the risk of a ransomware attack. It starts with having a firm ransomware policy.

  • Keep software and operating systems updated with the latest versions and patches. Outdated systems are easier to hack.
  • Create a company policy of never clicking on links or opening attachments from unknown sources
  • Follow the 321 rule for data backup: keep at least three copies, store two backups on different storage media, and ensure one of them is offsite.
  • Restrict employee’s permission to install and run software. This can potentially keep malware from even being installed or spreading throughout the company’s system.
  • Use strong spam and virus filters.
  • Require employees to use strong passwords with multi-factor authentication to access company data.

While taking secure steps to avoid ransomware from making its way onto your company’s system, hackers are always looking for loopholes or ways to gain access. Even the most modern system can have weak spots, and it only takes one mistake for a hacker to get what they need.

Ransomware Insurance Protects Your Business from Cyber Extortion

Ransomware and cyber extortion insurance is an incredible asset to your business. It helps protect your company from hackers; it prevents data loss from security breaches; and it can keep your business running while you recover from the attack.

Cyber extortion insurance typically covers three areas:

  1. Ransom Money that you pay to the hacker in response to a threat. Some policies even cover non-financial property that you trade for the ransom.
  1. Extortion-Related Expenses are the costs you incur from the threat. This could be anything from travel expenses to pay the ransom to hire a security firm to advise your response.
  1. Repair Costs cover damage incurred from the ransom. Just because you pay the hacker doesn’t mean your system will be returned to normal.

Keep in mind that your insurance company typically wants to approve any funds you pay for ransom before you actually do so. Making a payment without telling your provider first could result in having your claim denied. The same is true for extortion-related expenses. 

Ransomware insurance also does not cover fraudulent attacks. Your insurance company wants to see that reasonable efforts were made to ensure the threat isn’t a hoax.

What does Ransomware Insurance Cost?

There are various aspects of how your insurance carrier creates their quote. The type of business and kind of data it stores are the first things they’ll consider. From there, they consider your company’s ransomware policy and safeguards. They also look at your company’s history with attacks, payouts, and more.

The best way to get an accurate quote for your business is to contact Assured Standard. We offer the kinds of insurance your company needs to stay ahead of cybercriminals. Call for a free quote today, and let us help you be prepared. Our experienced brokers can evaluate your company’s needs and advise you on what will keep your business, your customers, and your employees safe.

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Assured Standard will protect your business with the right insurance, depending on your needs. Now more than ever, it’s crucial to have the right general liability insurance experts on your side. Protecting the future of your business starts today.
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