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Rise of Ransomware: Is Your Business Covered?

Blog PostsCybersecurity

Rise of Ransomware: Is Your Business Covered?

Read Time: 5 minutes Published: September 7, 2022

Over the past several years, the world has changed irreversibly. The global pandemic shifted our home lives significantly, while the business world struggled to keep customers in and hackers out. As a result, the shaky cybersecurity landscape created an environment where businesses must be hypervigilant against cyber attacks.

During this post-pandemic timeframe, businesses are focused on reinventing themselves in a world changed forever. Digital services have taken the place of in-person activities, from medical appointments to grocery shopping, exposing businesses to new cyber risks. Companies in all industries must adjust their risk management strategies to remain successful. This post highlights the recent rise of ransomware and how businesses can stay protected from malware attacks.

Understanding the Cybersecurity Landscape

Cybersecurity and data protection have been an ongoing concern since the 1970s, when developers launched a project called The Advanced Research Projects Agency Network (ARPANET). Since then, hackers and developers have been racing against each other to conquer the digital world. Some of the most common cyber attacks include:

  • Ransomware
  • Phishing
  • Password attacks
  • Denial of Service (DoS) attacks
  • Internet of Things (IoT) attacks

However, only recently has cybersecurity become a widely-known term. It’s safe to say that the shift to remote work contributed to cybersecurity’s push to the forefront. According to McKinsey’s American Opportunity Survey, 58% of Americans have the chance to work from home at least one day a week. Although many leaders considered flexible work schedules a temporary pandemic response, it’s now become a permanent feature.

Remote work created massive opportunities for cyber criminals to hack networks and systems. Hackers are also known to target certain industries more than others – education, healthcare, and government, to name a few.

The Rise of Ransomware

Ransomware is a type of malware that denies the victim access to their data unless they pay a ransom fee to the attackers. Although this strategy dates back to the late 1980s, recent attacks have become more complex. Ransomware fees have increased, and the keys to unlocking files have become nearly impossible to crack without paying the ransom.

Not only are we seeing more ransomware attacks, the severity and consequences of the attacks are also increasing. Nearly 40% of ransomware victims end up paying the ransom, which averages around $1.8 million nowadays. Unsurprisingly, businesses spend more than $75 billion each year dealing with ransomware costs. Unfortunately, the rate of these attacks shows no signs of slowing.

Risks of Ransomware

Aside from financial losses incurred by paying a ransom fee, businesses face other risks from ransomware attacks, including:

Reputational damage

The damage caused by ransomware attacks rarely ends with the ransom fee. Bad press for a company can often morph into reputational damage, turning loyal clients against the business. Ransomware is a hot topic, and media outlets are quick to publicize the latest attacks. The effects of this publicity can last long after other aspects of the business have recovered.

Costly D&O lawsuits

Company leaders are under increased pressure to mitigate cybersecurity threats. A shareholder’s suit may hit directors and officers incredibly hard if a data breach occurs, thus utilizing D&O insurance for cyber liability claims.

Founder Shield’s Customer Success Manager, Rachel Jenkins, explains further, “We are starting to see more, still limited but increasing, cyber claims bleed into D&O through shareholder litigation as there is an increased fiduciary duty on the C-suite to maintain proper cyber controls through regulations and industry requirements.”

How Businesses Can Stay Protected

Most risk management specialists warn that it’s not a matter of if a cyberattack will hit your company, but when. To protect your organization from ransomware attacks, follow these best practices.

  • Create a healthy cybersecurity culture: Although data protection is ultimately the company leaders’ responsibility, employees should play an active role in creating a healthy cybersecurity culture. Conduct training regularly to educate employees on how to identify and respond to threats.
  • Keep technology current: Software updates are often postponed or ignored because they take up valuable time. However, hackers look for these kinds of vulnerabilities. Stay current with the latest updates and use Mobile Device Management to conduct proactive rollouts at times that won’t impact productivity. .
  • Develop a recovery plan: Restoring regular services in the aftermath of a cyber attack is a stressful, labor-intensive process. Companies that establish a recovery plan are better equipped to maintain business continuity if an incident occurs.
  • Build a strong insurance program: Cyber liability insurance protects companies from third-party lawsuits relating to electronic activities, such as ransomware attacks or phishing scams. Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.

Protect Your Business from Ransomware

Protecting your company from an attack requires robust defenses and savvy data protection. Although ransomware continues to spread, and new cyber threats emerge every day, you’re not in this alone. Get in touch to learn more about Electric’s fully managed IT security services.

Wil Hamory

Wil Hamory is Executive Vice President of Sales at Founder Shield. Wil aims to match the pace of business of Founder Shield’s innovative clientele to provide tailored insurance solutions at scale. He has been involved in the mobility industry since its infancy and assisted many of Founder Shield’s On-Demand and Fintech clients meet legal requirements while positioning them to rapidly expand.

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