What Your Business Needs to Know About Ransomware and Cyber Extortion

Did you know that ransomware attacks are now one of the most popular cyberattacks, surpassing hacking and physical theft in cyber claims activity? The FBI estimated ransomware to be a $1 billion crime in 2016 and research reported that 42% of small and medium-sized businesses were hit by ransomware attacks.

What is Ransomware?

Ransomware is a type of malware that ‘kidnaps’ data and holds it hostage by keeping the owner locked out until a ransom is paid. Cyber criminals often use ransomware in cyber extortion crimes to demand money.

How does Cyber Extortion Work?

Consider this scenario:

The manager at a busy downtown bar downloads an email attachment that appears to be from her bookkeeper. The attachment contains ransomware which, when downloaded, immediately encrypts files on the manager’s computer — including accounting and payroll records. When the manager tries to access a file, a message appears on the computer screen directing her to pay a ransom in bitcoin in order to receive a decryption key that will unlock her files.

With the help of an information technology (IT) expert and legal counsel, the threat is determined to be credible, and the ransom is paid. The ransom, IT fees and legal expenses total $50,000. This would be covered by Society’s leading-edge cyber liability insurance. Cyber extortion coverage provides for expenses incurred and extortion monies paid as a direct result of a credible cyber extortion threat made against you.

What is bitcoin? A digital currency created and exchanged independent of banks or government; transactions are usually completed anonymously.

Technology and the risks associated with it affect every person and business. And in recent years, cyber criminals have increasingly targeted small businesses. Ask your local Society agent for details on the many ways a cyber liability policy can help protect your business, including coverage for privacy breach response costs and payment card industry penalties.

Author

As a mutual insurance company, we operate and exist for the benefit of our policyholders. For more than 100 years, Society has been helping businesses overcome the unexpected with comprehensive coverage packages and outstanding claims handling, underwriting and risk management.

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