Ransomware Update: The Evolving Threat

The surge in ransomware may be reaching crisis levels. Cyber insurance premiums are expected to rise between 20% and 50% in 2021, according to Business Insurance, and this increase in largely the result of ransomware. Attacks have increased in both frequency and severity, and it appears that no one is safe.

Responding to Ransomware Attacks Is Getting Trickier

According to Infosecurity Magazine, a recent report found that the average ransomware payment increased from $115,123 in 2019 to $312,493 in 2020. The largest ransomware payment paid also increased significantly, from $5 million to $10 million.

Faced with these jaw-dropping demands, many businesses might not want to pay. In fact, that’s what the FBI advises. The FBI says that paying a ransom does not guarantee that the files will be returned, and it can encourage future attacks, so it’s better not to pay.

Unfortunately, even if you don’t pay, a ransomware incident can be expensive because of the digital forensics investigations, data breach notification requirements, business interruption and other losses involved. Infosecurity Magazine says that victims that have opted not to pay have ended up with losses of more than $60 million.

Also, if you’re depending on backups, make sure they’re actually safe. According to ZDNet, many ransomware victims have learned the hard way that backup files can also be infected. ZDNet also warns that “double extortion” is a growing problem. Instead of simply encrypting files and demanding payment for the decryption key, many cybercriminals are now threatening to sell stolen data. If victims want to avoid having their data leaked, they may feel that they have no choice but to pay up. Of course, even this doesn’t guarantee that the data will be safe. You’re left having to take the cybercriminals word for it.

New Regulations May Be Coming

Organizations that have been hit with a ransomware or other cyberattacks already need to comply with state data breach notification laws. In the future, they may also have to comply with new ransomware payment notification laws. According to TechCrunch, a new U.S. bill, the Ransom Disclosure Act, would require companies to disclose ransomware payments.

Some people would rather go further and make ransomware payments illegal. According to ComputerWeekly, 79% of cyber professionals would support making ransom payments illegal. Meanwhile, the Department of Treasury says that companies that facilitate ransomware payments could risk violating OFAC regulations.

Attacks Are Getting More Sophisticated – But the Basics Remain Important

There’s been a lot of talk about how cyberattacks have gotten more sophisticated. This is true. Cybercriminals are always working on new strategies, so organizations need to stay one step ahead with their cybersecurity efforts.

At the same time, the basics of cybersecurity remain vital. ZDNet has warned that many organizations have failed to patch vulnerabilities that have been known for years, and cybercriminals keep exploiting them.

Organizations must do everything possible to protect themselves from this growing threat.

Install any security updates and patches now.
Review CISA’s cybersecurity best practices.
Create a ransomware incident response plan.
Expect rate increase the next time your cyber policy is up for renewal.
Consider adopting multi-factor authentication protocols – in fact some cyber insurers are now requiring this as a condition for underwriting.

Cyber Insurance

Cyber insurers have been inundated with claims and as result, coverage terms are getting tighter and underwriting is getting stricter. Be sure to sit down with your agent and review your policy in detail so you understand how your coverage will perform in the event of an attack.

If you have questions or need commercial insurance guidance, contact BNC Insurance.