Will cyber insurance pay ransom?
Ransomware protection is often covered as part of cyber liability insurance, so there is no 'standard' policy, with the specifics varying significantly depending on the cyber insurer.
Cyber insurance can cover the associated costs, which might include the ransom payment itself (though this is a point of debate in the industry), expenses related to data recovery, business interruption, and fees for consultants and experts who assist in managing and mitigating the attack.
Loss of value through intellectual property (IP) theft
Often, they won't recognize IP theft until long after an incident (for example, when a competitor takes a new product to market). Nevertheless, devaluation due to IP theft is a loss most cyber policies don't cover.
Is it legal to pay after a ransomware attack? While it is legal to pay the ransom in the U.S., cybersecurity experts recommend companies not pay. Given the criticality of assets stolen, however, a company can decide it has to pay the ransom and it is legally allowed to do so.
Cyber insurance covers the liability actions that might be brought against you, arising out of a cyber event (third party loss), such as investigation and defence costs, civil damages, compensation payments to affected parties.
Cyber insurance generally covers your business' liability for a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver's license numbers and health records.
Dozens of ransomware cases are reported each month, with companies locked out of their files and facing extortionate demands. The current going rate for decryption keys is in the region of 0.3 bitcoin (about £100,000, or $140,000), but sometimes attackers set their sights much higher.
Your cyber-insurance policy should typically cover several fines and penalties, including the fines associated with data breaches and privacy law violations.
A cyber liability policy protects you from the many costs associated with a major data breach. Our policy covers the major cyber liability perils including: Legal Defense Cost. State and Federal Fines and Penalties.
Bodily injury and property damage claims: Cyber liability does not cover claims of bodily injury or property damage. Businesses need general liability insurance to protect themselves against these claims.
Why you shouldn't pay ransom?
Despite paying the ransom, the hacker may not be able to decrypt your files. In some cases, the ransomware may be poorly coded or deployed and it is possible the hackers themselves may not be able to decrypt your files even if you pay the ransom.
Never pay a ransom
There is no guarantee you will regain access to your information, nor prevent it from being sold or leaked online. You may also be targeted by another attack.
In most cases, communication with a criminal in the case of ransomware goes through an incident company, then an insurance company if the incident comany decides that paying a ransom is the best in this scenario. In pretty much all cases, however, paying a ransom is heavily advised against.
Top factors that could lead to your claims getting denied: Poor prevention practices. Third-party or contractor fault. Accidental errors and omissions.
Cyber insurance protects against losses that result from a range of cyber incidents, including social engineering scams and ransomware attacks. But is it worth the investment? It's a resounding 'yes'.
Most cyber insurance policies today require having endpoint detection and response, managed detection and response (i.e., Managed SOC) and security awareness training services in place, in addition to other commercially reasonable security tools, such as antivirus and firewalls.
An employee inadvertently downloaded a destructive computer virus onto the company's network, resulting in widespread data loss and transmission of the virus to a client's computer network. The client sued the company, contending it should have prevented transmission of the virus.
The severity and cost of cyberattacks like these, especially where ransomware is involved, have been key drivers of cyber insurance costs.
On average, less than 5% of hackers and other cybercriminals are caught, and only 0.3% of all reported cybercrime complaints are enforced. There are many issues that come with trying to police cybercrime.
According to data from the incident response firm Coveware, which frequently negotiates with ransomware gangs on behalf of victims, only 29 percent of ransomware victims paid a ransom in the fourth quarter of 2023, a dramatic drop from payment rates between 70 percent and 80 percent for most of 2019 and 2020.
How is ransom payment normally done?
Ransomware attackers usually demand payment to be wired through Western Union or paid through a specialized text message. Some attackers demand payment in the form of gift cards like an Amazon or iTunes Gift Card. Ransomware demands can be as low as a few hundred dollars to as much as $50,000.
A certificate of insurance (COI) serves as proof that you have a valid cyber insurance policy.
The average cyber liability coverage limits typically fall between $500,000 and $5 million per incident. It is important to keep these limits in mind when looking at cyber insurance cost. As more cyber incidents occur, we have seen a 28% cyber insurance premium increase in 2022.
Your business can be held liable if certain data is compromised, not only by hacking attacks but even if a smartphone is lost or a laptop computer is stolen.
Cybersecurity insurance policies typically exclude issues that were caused by human error or negligence or could have been prevented. Here are common exclusions: Poor security processes — attacks that occur due to ineffective security processes or poor configuration management.
