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Ransomware & Cyber Attacks Increase As Insurance Pays The Ransom

Ransomware & Cyber Attacks Increase Leaving Insurance To Pay The Ransom

Over the past few years, cyber attacks on businesses have drastically increased. There are multiple factors that have led to the increase of cyberattacks. From cybersecurity trends to the undeniable shift to digital that has happened over recent years, online databases have continually struggled to stay up to date and protected as technology develops. Cyber insurance has developed as a fallback for businesses to stay protected. Below we assess the cybersecurity trends and reasons for increased cyber-attacks and taking this information we will assess the developing cyber insurance crisis.

Cyber Security Trends

In Varonis’s list of 134 cybersecurity trends and stats, it becomes evident that cybersecurity is a battlefield. There are ever-increasing attacks that occur through human error as well as ever-developing cyber attack strategies. The attacks have also increased in ransomware. These trends indicate the profitability in ransomware and how important it is to take protective measures against it.

Reasons For Increased Cyberattacks & Ransomware To Businesses

Some attribute the increase to cyber insurance coverage paying off ransomware. Another reason the spike in cyber attacks has occurred is due to our financial information being more and more accessible online. Cryptocurrency is a perfect example of this. Not only are our financial transactions online, but some finances are strictly digital. The other common factor is the abrupt increase of employees working from home and accessing work files and databases remotely.

The Connection Between Ransomware Attacks And Cyber Insurance

Ransomware is the modern-day bank robbery. We have all seen the movie scene where the bank robber tells everyone to remain calm. They inform them that they are not stealing the people’s money, but the bank’s money and the most important fact is it is all insured. Great, no one has to be a hero, some thug makes off with a bit of cash and life goes back to normal. That is until the constant bank robberies become a financial issue.

The same situation can be seen with ransomware. A business’s information and digital data is ransomed, the insurance pays the ransom and it is business as usual. What needs to be noted is this cycle can lead to an increase in ransomware attacks. The attackers know there will be a payout by the insurance company. As these attacks increase so does the cost of cyber insurance. What can be done?

Just as security increased in banks, security for businesses’ data needs to increase. It is likely as protective measures increase within a business, the cost of cyber insurance will decrease and the number of successful ransomware attacks will decrease. Expectations by the insurance company for you to protect your data is to be expected. If a bank were to keep all of their cash in boxes out front of their building would their insurance continue to protect them? No, because they aren’t taking any protective measures on their end. The bank invests in a safe and places the money there. Okay, that is a great start.

What Should Your Business Do About Ransomware & Cyber Security?

With cybersecurity being a constant and ever-growing risk for your business there are two things you should do.

  1. Cyber Insurance: First, you need to get cyber insurance for your company. Having cyber insurance will help protect your company. Even if you take measures to protect your data, there is always a chance you will be the victim of an attack. This can hurt your business financially as well as damage relationships with clients.
  2. Internal Measures: Second, you need to put specific practices in place to protect your business’s data. While having insurance will protect your business from specific cyber attacks, if your data is extremely susceptible to attacks your insurance might increase and your business could be inconvenienced by ongoing cyber threats. Typically cybersecurity breaches are due to human error. Provide your employees with correct training as well as guidance on protecting your data as well as your client’s data.

Get Cyber Security Insurance For Your Business

Contact Strickler Insurance to get a free quote on cyber insurance for your business. We work with a wide range of industries throughout PennsylvaniaNew YorkNew JerseyMarylandDelaware, and Virginia. Don’t wait to get cyber insurance and leave your business susceptible to data attacks.