Ransomware attacks have been on the rise in recent years and have become one of the most effective digital threats. One of the most noteworthy attacks happened in April 2021, when the attack on the Colonial Pipeline Co. networks was pulled off using a VPN account, which enabled remote access to the organization’s computer network. The magnitude of the Colonial Pipeline attack affected the lives of millions of people. It disrupted the supply of gasoline and other fuel products to America's East Coast, causing panic and long queues at gas stations.
Canadian business's economic and reputation impacts of a ransomware attack cannot be overstated, as its technology-driven economy may be on the hackers' radar. Besides investing heavily in mitigation mechanisms, companies are looking to protect themselves from the financial fallout of a breach by opting for cyber insurance.
The average cost of a ransomware attack
The State of Ransomware 2021 report by Sophos revealed that the average ransom paid by mid-size organizations is currently around US$170,404. Still, remediation costs hover around $1.85 million – a 10-fold increase over the ransom. With insights from various mid-sized organizations indicating that ransomware attacks are up by 105%, security leaders are seeking to strengthen their organizations’ security posture while placing ransomware protection at the core of their business functions. In some US states, the impact of ransomware has been so severe that authorities have made cybersecurity a priority in their budget.
The increasing number of ransomware attacks and the high value of cyber insurance claims have placed the cyber insurance sector under a lot of strain. Insurance providers are not only raising their premiums and rethinking their portfolios but also shooting down prospective customers lacking efficient cybersecurity measures.
Forrester predicts that cyber insurance will soon become mandatory for all third-party relationships. However, the stringent norms set by insurers are burdening enterprises with the financial strain of offering high levels of validation to insurers about their cyber hygiene for a reasonable ransom coverage.
See more about Cyber Insurance: Are you Covered?
What is cybersecurity insurance, and why do businesses need it?
Cybersecurity insurance, also known as cyber liability insurance, is a binding contract that is purchased to mitigate the aftermath of cyber-attacks. Cybersecurity insurance providers seek early adopters of formulated risk models considering the dynamic nature of cybersecurity policies.
The loss, compromise, or theft of electronic data has devastating effects on a business, which incurs heavy revenue losses, besides losing customer confidence. Therefore, cyber liability coverage is imperative for protecting businesses against the financial risk of cyberattacks and providing mitigation measures for well-timed remediation.
See more about Cybersecurity Regulations for Insurance Companies
Does cyber insurance cover ransomware?
The Cyber Threat Bulletin: Modern Ransomware and Its Evolution, published by the Canadian Centre for Cyber Security (Cyber Centre), predicted that the tactics of ransomware operations have established a model for more modern, high-profile attacks with enormous ransom demands.
With cyber insurance being an emerging industry, there are grey areas around how businesses are working on the presumption that general liability insurance also covers cyberattacks. Unfortunately, cyber insurance policies do not always provide coverage for ransomware as the decision is largely governed by the overall risk appetite of the insurer.
Cyber insurance is unquestionably not an end-end solution. However, it is a valuable component of a larger risk management strategy. To combat fast-emerging cyber dangers, security specialists should become familiar with the following fundamental disciplines:
Recognizing and preempting threats
Using regular patches
Managing user access and privileges
Chartering cutting-edge cyber hygiene
As the business world increasingly moves online, the severity of cyber threats has also increased. Consequently, it has become essential for businesses to take out cybersecurity insurance to protect themselves in case of a cyberattack financially.
While ransomware attacks continue to target enterprises with weak security postures, businesses must understand that cyber insurance does not provide a silver-bullet solution. A comprehensive approach that includes regular patches, cutting-edge cyber hygiene, and user access management is required to protect businesses against these fast-emerging dangers.
Packetlabs has been at the forefront of cybersecurity and recognizes the overarching need for cutting-edge security measures across enterprises. Our cybersecurity experts believe that frequent cyber risk assessments, creating ransomware-attack procedures, and using analytics to protect your digital assets are central to cyber hygiene.
Contact the Packetlabs team today for a consultation or quote.