Closing The Gaps Between Ransomware and Cybersecurity Insurance
One of the biggest cybersecurity issues facing businesses and organizations across the world is ransomware. Over the years, ransomware has taken on a different meaning to businesses, organizations, and local governments. Ransomware is not just a type of malware. Attackers have turned ransomware into a sophisticated and combative form of extortion.
Ransomware is a business model in which criminal groups seek to take a victim’s data, infrastructure, intellectual property, privacy, etc. hostage. Whether a business or organization purchases insurance does not have a bearing on the value of the prime assets that have been held hostage. Businesses and organizations are not targeted simply because they have an insurance policy — this is not information that cyber criminal groups have before they attempt to compromise a system.
What Can Cause Ransomware?
Typically, businesses and organizations are targeted by malicious actors because they have not made the best technological or security choices, regularly exposed to the public internet, resulting in malicious actors viewing them as easy targets. Most cybercriminal groups target businesses and organizations based on their financial resources and the value of their assets.
Are Ransomware Victims targeted?
Ransomware victims are hardly ever targeted. Can you imagine how much time it will take for cybercriminals to target victims? Targeting takes a significant amount of time, money, and research. Generally, attackers will go after a specific worldwide vulnerability that will instantly cause hysteria and disperse links to ransomware to as many potential victims as possible and sit back and wait for someone to click the link.
Cyber insurance was put in place to protect businesses and organizations against the aftermath of a cyberattack, including covering the financial costs associated with the attack. However, as insurance claims mount and cybersecurity insurance providers review the coverage they are offering, many anticipate that changes will come soon.
Some leaders will argue that cyber insurance encourages ransomware victims to pay the ransom demand because it will be covered by the insurance provider, rather than implement the proper security measures to combat cyberattacks. Cybersecurity insurance providers argue that the customers are the ones who decide to pay the ransom, not the insurance provider.
It is not an illegal act to pay a cybercriminals, but this is not an act that is recommended by law enforcement officials because officials believe this action will encourage cybercriminals to continue with their attacks. Not only do some leaders believe that this act encourages additional attacks by cybercriminals, but leaders feel this is not sustainable for the cybersecurity insurance industry. Cybersecurity has not necessarily lived up to the expectations that it will act as a solution for improving cybersecurity practices.
Cybersecurity Insurers Do Not Make The Decisions
Insurers do not make the decision about whether the extortionists should receive the ransom amount they are seeking — the insurance buyer always has the final say. Unfortunately, many businesses and organizations feel their best option is to pay the ransom demand. Even if cybersecurity insurance covers the cost of a prolonged service disruption, there are other things victims of ransomware attacks will need to consider, including the following:
- How many aspects of the business or organization will be impacted if there is a disruption?
- How will the customers be impacted by a service disruption?
- How will you be viewed by customers and potential customers moving forward?
If a business or organization is insured but makes the decision not to have its insurance provider by the ransom, what will happen? Typically, the insurance provider will pay network recovery fees and reimburse the business or organization for lost revenue.
Ransomware and Cybersecurity Insurance
Currently, cybercriminals have the upper hand, mainly because they are using sophisticated tools and business models that allow them to carry out their motives with efficiency and effectiveness. Many leaders and critics continue to assert that cyber risk underwriting does not have the foundational support that is needed to reduce the number of ransomware attacks. However, there are measures that cybersecurity insurance providers could take to close the gaps that exist between ransomware and cybersecurity insurance, including offering security training and vulnerability testing.
Why are Cybercriminals Succeeding?
The rise in ransomware attacks is not necessarily occurring because insurance providers are paying claims, more ransomware attacks are happening because cybercriminals are finding the level of success they look for. Too many businesses and organizations remain vulnerable to attacks because there are too many gaps in technology and security. Data breaches can cost businesses and organizations millions of dollars. Yet, the attacks are and easy to execute, making the barrier to entry for cybercriminals low.
The cybercriminals who are responsible for the ransomware attacks will generally operate in a different country or outside the legal jurisdiction of the court and the prosecutors who are seeking the conviction. If it is difficult to prosecute cybercriminals who are operating in the same jurisdiction as the victim, it will be next to impossible to prosecute cybercriminals who are operating on the opposite side of the globe. Cybercriminals are aware of this, and this is one of the reasons why they feel free to carry out as many attacks as they wish.
What Can Businesses and Organizations Do To Reduce Their Risks?
Businesses and organizations should embrace security best practices, regardless of their size or industry. Ransomware attacks can happen to businesses of any size and in any sector, but embracing best practices as it relates to cybersecurity can limit your risks of becoming the next victim of an attack. Here are some best practices that your business or organization should embrace:
- Have an effective information security program
- Perform Cyber risk assessments
- Perform Health checks
- Implement risk management services
- Employ effective backup strategies
- Keep your credentials safe
- Know the signs of a phishing attack and know how to recognize suspicious links and unsafe websites
- Avoid disclosing confidential and sensitive information
The impact of ransomware on the cybersecurity insurance industry highlights the need to address some of the common issues. While cybersecurity insurance does exist to help businesses and organizations, it does not seem to be improving cybersecurity. At Alvarez Technology Group, we provide IT services and IT support for organizations in the Salinas CA area. We understand what it takes to improve your business or organization’s cybersecurity practices. Contact us today at (831) 753-7677 for your consultation.