Recent Ransomware Insurance Payouts Encourages More Cyber-Attacks.

By:  |  Category: Blog Wednesday, September 25th, 2019  |  No Comments

We can purchase insurance for just about anything. Pet Insurance, life insurance, insurance on an engagement ring or car, even Heidi Klum’s legs are insured for $2.2 million dollars (yes, we meant anything). We do it because these items have value, and so that if something happens to them we are compensated for their loss.

The same holds true with data. If it’s lost (or stolen) we are compensated for that loss, or for the loss of time and resources spent recovering it.   

The number of ransomware attacks have doubled so far this year, so the amount of time and resources spent to reclaim lost data has also doubled. Why is this problem snowballing into something seemingly uncontrollable? How much money do these cyber criminals actually make?

Cybercrime has drawn in at least $1.5 trillion in profits each year. Revolting. 

A portion of those profits are from companies and municipalities that were hit with ransomware and decided it would be best to cough up the cash, just to avoid the up-hill battle of lost data and downtime. Another reason they decided to satisfy the ransom was in-part due to their insurance policy. If your policy covers $100,000 and the ransom is $132,000, you’re only losing $32,000 and that’s far better than the lost earnings while waiting weeks to be back in full swing.

This is exactly what is enticing cyber thieves to deploy their ransomware. The promise of a payout.

Not just a payout to themselves, but an insurance payout to their intended target making it more likely their endeavor will succeed.

These cyber-insurance policies are designed to mitigate the damage due to an attack, but it’s speculated now that they could be encouraging hackers and influencing how specifically they target their victims (i.e. if they have insurance or not).

In July of this year hackers demanded $5.3 million from the City of Massachusetts who negotiated a ransom payment of $400,000. In a statement made by the Mayor several months after the attack he argued it would be “irresponsible” to dismiss “the possibility of obtaining the decryption key if insurance coverage could cover the full cost of the ransom payment.”

According to Coveware a firm that negotiates on behalf of ransomware victims, this year alone the average ransom settlement rose 184% from $12,762 in March to $36,295 in June. High profile hacks are speculated to have happened due to insurers’ help in paying the ransom, and it doesn’t seem like it will be slowing down any time soon.

The decision to pay a ransom is entirely the victims, and there is a lot of thought involved on that slippery slope. Do they have their data backed-up? Are they able to survive the loss? What happens if they can’t recover their data?

The threat is very real, and the time to think about it is before it happens, not in the midst of an attack.

If you need help with your business technology needs give EnhancedTECH a call at 714-970-9330 or contact us at [email protected]

Sources:

https://www.msn.com/en-us/news/us/payouts-from-insurance-policies-may-fuel-ransomware-attacks/ar-AAHAT6v

Samantha Keller

Director of Marketing and PR at EnhancedTECH
Samantha Keller (AKA Sam) is a published author, tech-blogger, event-planner and mother of three fabulous humans. Samantha has worked in the IT field for the last fifteen years, intertwining a freelance writing career along with technology sales, events and marketing. She began working for EnhancedTECH ten years ago after earning her Bachelor’s degree from UCLA and attending Fuller Seminary. She is a lover of kickboxing, extra-strong coffee, and Wolfpack football.Her regular blog columns feature upcoming tech trends, cybersecurity tips, and practical solutions geared towards enhancing your business through technology.
Samantha Keller
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