Towergate Insurance Brokers, a UK-based insurance intermediary, has urged businesses to recheck their cyber insurance to make sure they have adequate coverage as ransomware attacks rise.
After global figures dropped in 2022, ransomware attacks have been on the rise since early 2023, which is believed to be linked to Russia’s ongoing invasion of Ukraine.
“When it comes to ransomware attacks, we ask clients how they would respond. Do they have the expertise or financial resources to deal with an attack? If the answer is ‘no’, I say unequivocally that they need to investigate a specialist insurer,” said Robert Lewis, Corporate Broking Director, Towergate.
“These aren’t attacks being carried out by one man and his laptop, they are sophisticated businesses using advanced technology to target many organisations at once. This is such a rising threat that it really is imperative that businesses work with a broker who has a thorough understanding of the risks and options available,” he added.
Ransomware is malware designed to deny a user or organisation access to files on their computer system. By encrypting these files and demanding a ransom payment for the decryption key, cyber-attackers place organisations in a position where paying the ransom is the easiest and cheapest way to regain access to their files.
Interestingly, Lewis has also called on customers to not buy the cheapest premium in order to save costs, highlighting the need to check the limit before signing anything.
“There are cases where insurers don’t pay out in the event of a loss due to a simple breach of conditions which could’ve been avoided had the business received better advice,” explained Lewis.
Another important factor is the reputational damage caused by falling victim to a ransomware attack. Research carried out by Object First shows that 40% of consumers are sceptic regarding organisations’ data protection capabilities, and 75% would shift their business to alternate companies following a ransomware attack.
Lewis said: “This impact on a business’s reputation is key. Some insurance could cover the immediate costs but what is the lasting damage? Prevention is definitely better than cure but there are also insurance policies that will offer crisis communications support which could be invaluable in these situations.
“Cybercrime is here to stay and a massive threat to individuals and organisations UK-wide. Despite evidence that it can happen to anyone, people are still convinced that these attacks won’t happen to them. Cyber-criminals and the threat that they pose are constantly evolving. I would strongly urge anyone who isn’t sure where their business insurance stands to speak to an expert broker today.”
