According to BBC, The Association of British Insurers (ABI) has been accused of “funding” organized crime by including ransomware blackmail payments in cyber insurance policies.
What Is The Argument Of Including Ransomware Payouts In Cyber Insurance Policies?
Recently, Oxford University’s Prof. Ciaran Martin expressed his concerns about insurance policies covering ransomware payout is inevitably “funding organized crimes.” Some might argue that any insurance covered against a criminal act could trick the policyholder into a false sense of security.
ABI claims that the inclusion in first-party policies was not “an alternative” to organizations doing everything else possible to mitigate the damage and operational risk caused by cyberattacks. But, without it, victims could face “financial ruin.”
What Is Ransomware?
Ransomware is malware in which targeted computers are locked by cyber-criminals, who then demand a ransom. The ask if often in the form of Bitcoin to unlock the computer access and return the files they had held hostage.
A ransomware attack occurs every 11 seconds (source: Cyber Security Ventures and 1.5 million phishing sites are created every month (Source: webroot.com).
Without the right backups or an urgent need to restore their systems, businesses are under extreme pressure to pay up.
What Are The Negative Effects Of Including Ransomware In Cyber Insurance?
US cyber insurance provider Coalition confirmed that ransomware incidents accounted for 41% of claims filed during the first half of 2020.
And, according to the credit rating service, Moody’s 2021 outlook for cybersecurity and cyber-related risks, the “continued proliferation” of ransomware attacks will force insurers to re-examine their cyber insurance policies and coverage over the coming year.
Insurers have responded to rising financial losses by raising premium rates and narrowing terms and conditions, including raising deductibles or lowering policy limits, or both,” the company says. “Higher insurance costs, in turn, could weigh on the finances of some organizations, causing them to rethink the purchases of their cyber insurance policies.
How To Protect Your Business From A Ransomware Attack?
As a first step, we highly recommend conducting a cybersecurity assessment of your IT infrastructure if you haven’t done one in the last 6 months. This will help you understand your business security status and let the cybersecurity experts guide you on the next steps. If you want to learn about our Cyber Security Assessment, get in touch with us at 905.474.4332.