The Rise of Ransomware and How it Impacts Cyber Insurance
On October 18, 2024, CNBC posted an article titled, “The government is getting fed up with ransomware payments fueling endless cycle of cyberattacks”. This article states that the government wants cyber insurance carriers to make a choice to not pay ransom for ransomware incidents. This theory is very common and potentially short-sided. Businesses need to have options for financial protection, but it is important that they are not reliant on cyber insurance as the only control in place to mitigate the risk of ransomware.
Successful ransomware attacks target organizations that do not have comprehensive disaster recovery plans and data back up policies. Organizations with a plan to recovery operations and access to their data backups do not have to respond to a ransomware attack in the same way an organization with little to no plan would need to respond.
Timing is everything and I just happened to provide a Tech Talk for the National Parking Association on October 17th about how to plan and prepare for cyber insurance. I go over the importance of Disaster Recovery and Business Continuity Plan as well as Back up Policy.
Although the fed wants to take more extreme measures the reality is that cyber insurance carriers are going to want to know if you are doing the right thing to mitigate your risk. They are trying to determine what the likelihood your organization would have to pay out in a ransomware situation.
Cyber insurance carriers have continually enhanced the comprehensive nature of the application process with the goal of providing coverage to those with better overall security and privacy practices. Focusing on your security and privacy practices will have a direct impact on your ability to obtain cyber insurance and your ability to successfully process a claim.
As pressures continue to grow, insurance carriers will always fall back on their risk calculations to determine if you are insurable and will go reference your application to ensure compliance with the practices you stated in the application when it comes to claims.
