You’ve heard us talk a lot about the increase in cyber attacks and ransomware and how it’s an exploding market and a very vastly increasing risk for companies. How big of an increase? Well, here you go.
The Alarming Surge in Ransomware
This is from a cybersecurity industry publication. It’s a 500% surge in ransomware losses. A global leader in cybersecurity revealed its annual state ransomware report that the average ransom payment has increased 500%. Organizations are paying a payment of 2 million, up from 400,000 just last year. CDK just paid $25 million allegedly to get rid of their cyber attack lockup.
Rising Costs of Cyber Attack Resolution
So if you’re a company that has not been affected by a cyber attack or cyber risk, be aware that the costs for resolving this are going up exponentially. You may find that hundreds of thousands of dollars is not enough if you have a cyber liability.
Choosing the Right Policy
The policy you want to make sure it’s a standalone policy, not just an endorsement on your existing general liability or GL policy. You want to make sure the coverages are more than you know, 10 or 15,000, which is nothing these days, and that it covers third parties. You want to make sure it covers upstream and downstream clients and vendors and that it also has coverage for active monitoring.
Active Monitoring and Response Teams
So during the course of that policy period, the insurance company is helping you monitor for threats and breaches. In addition, you want to make sure the policy has a response team so if you have an attack, you can just pick up the phone, call them, and they have a response team available.
Considering Policy Options
There are other policies that don’t have these that may be cheaper. You may want to consider those, but those are the keys that we would recommend you having, and if not, that you intentionally disclaim those and not have those part of the coverage that you go with. Because the losses are increasing, it’s just a matter of time. Every business will be affected by it at some point.
