Reports of new cyber attack continue the discussion we started with yesterday's blog post about common barriers to coverage. Barriers to today's discussion? Ransomware.
Ransomware attacks are increasing. Security service company SonicWall reported that ransomware attacks increased by a factor of 167, from 3.8 million in 2015 to 638 million in 2016. Likewise, insurance company Beazley reported that ransomware claims quadrupled in 2016 and is expected to double again in 2017.
Despite these trends, many common cyber forms do not incur amounts to restore system access or restore stolen data. Instead, the forms focus on ransom amounts to avoid crimes or the release of personal information. This gap in coverage is easily handled by approval, but surprisingly, many companies do not have such approvals.
The risk of this often unaddressed gap is real. In January, cyber criminals opened an Austrian hotel network and locked the remote door at the hotel doors and prevented guests from entering their rooms. Efforts to issue new cards were unsuccessful, and the breakdown of doors would be too expensive. In the end, the hotel paid 2 bitcoins (about $ 1
The prisoner's dilemma caused by ransom attacks may have more than just monetary consequences. Cockrell Hill, Texas Police Department lost video evidence and digital documents after hackers took over their computer system. Announcements demanded about $ 4,000 bitcoin to retrieve the files, which the department refused to pay after consulting the FBI. In an attempt to end the attack, the department dried its servers clean, but could not restore any files. It turned out that the system backup department had captured only the already infected files. The department argues that none of the lost data was "critical", but many criminal defense cases are already questioning whether that is the case, especially for fees that claimed video evidence.
The amounts of games may seem small but successful solves promises to encourage greater demands and failed passwords can still cause significant costs for manually recovering lost data – that is, when data can be recovered. And the consequence break in the policyholder's normal business can have a significant financial impact that far exceeds the payroll. The solution to these problems should not be simply to store money to manage these risks or to rebuild damaged systems or data. Companies must actively improve their risk protection, including improving insurance coverage. Policyholders should initiate the process by reading their policies and working with experienced brokers and coverage advisors to ensure that covers really protect against real risks.