With ransomware being a growing threat, businesses around the world will need to make defenses against these risks a high priority if they are to protect themselves from attacks. In addition to security software solutions, many will look to more comprehensive insurance coverage to provide another layer of protection.
Cyber insurance policies are nothing new, but specific provisions to guard against the damage caused by ransomware are a growing area of interest. This could include reimbursement for direct payments, or help with associated costs such as investigations and rebuilding systems.
But how effective are these policies, and what can they do, if anything, to prevent firms from falling victim in the first place?
One reason why firms will look for cyber insurance that covers ransomware is to cope with the rapidly rising cost of these attacks.
IBM and the Ponemon Institute’s annual Cost of a Data Breach survey for 2022 found that expenses related to these incidents has increased by 13 percent over the last two years, reaching a new high of $4.35 million per incident on average.
Importantly, it also warned that in the case of ransomware attacks, simply paying up is no guarantee that organizations will minimize the financial losses. In fact, taking this route does very little to reduce the overall cost of a breach – and may in the long run lead to higher expenses, especially if it incentivizes repeat attacks.
In this case, any money given to ransomware authors could be better spent hardening defenses and investing in resources that could prevent attacks from occurring in the first place.
Ransomware insurance may therefore play a vital role in recovering from an attack, whether or not direct payments are made. By providing the financial secu ..
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