Ransomware Insurance: A Guide to Cyber Coverage for Small Businesses

It’s a small business owner’s worst nightmare: An employee receives a suspicious email from a sender imitating their bank, they click a link asking them to verify their information, and suddenly, everyone in your company is locked out of your network.

This is what phishing and ransomware attacks look like. More than just a nuisance, these cybercrimes expose sensitive details about your customers, employees, and operations to bad actors. They can also put you, your staff, and your customers at serious risk of identity theft.

That’s why it’s important to learn how to prevent attacks and protect your business. But even with strong cyber safety measures in place, human error remains a factor. One key step you can take is purchasing cyber attack insurance.

Read on for some phishing and cybercrime prevention strategies and tips for purchasing ransomware coverage from our experts.

What Is Ransomware Insurance?

As cyber attacks become more sophisticated, it’s important to use more than just firewalls and antivirus software to protect your business and its associates. Ransomware coverage is a key element of cyber insurance policies that helps protect businesses from the high cost of these attacks.

Most standard cyber insurance policies include ransomware coverage, which helps pay for the following costs associated with ransomware attacks:

• The ransom cyber criminals demand
• Digital forensics
• Costs to restore and recover lost assets
• Lost income due to business interruption
• Legal costs associated with the attack
• Consultancy fees
• New and upgraded hardware

Should You Pay the Ransom?

Law enforcement does not recommend paying any ransom demanded by cyber criminals as part of an attack. However, it’s up to you and your business to determine whether it’s worth the cost or the risk that you might not get your data back.

Sometimes, data and assets can be restored without paying ransoms. If this route is possible after an attack, cyber insurance can cover the cost of restoring data from backups. But if you choose to pay, cyber insurance with ransomware coverage can help cover the ransom. Experts from your insurance provider can work with you and your business to determine the best course of action. Sometimes, experts and negotiators can reduce ransom demands.

For small businesses, ransomware attacks and data breaches can add up to six-figure losses. And because of their potentially limited security resources, small businesses can be a particularly attractive target for cyber criminals. In addition to training your staff and following best practices for digital safety, it’s wise to invest in a good cyber insurance policy with strong ransomware coverage and expert resources.

Other Benefits of Ransomware Insurance

Beyond receiving financial assistance, additional benefits of ransomware insurance include:

• Help with incident response strategies from cyber experts
• Help coming up with longer-term recovery plans after ransomware attacks
• An incentive to safeguard your business’ networks, as many cyber insurance policies have stringent policies requiring preventative measures

Protecting Your Business from Ransom Attacks

There are several steps you can take to protect your business’ servers and sensitive data from cyber criminals.

1. Back up your data: Regularly save your files to an external drive or a server that isn’t connected to your network.
2. Keep security up to date: Always install the latest patches and updates in your security software as soon as possible. Put additional means of protection in place if you haven’t already. These can include email authentication or intrusion prevention software. It’s best practice to set your security software to update automatically, although manual updates may be required on some devices.
3. Have a plan in place: Put in writing how your company would stay up and running after a cyber attack. Share the plan with your team.
4. Train your staff: Teach your team how to avoid attacks and demonstrate common ways computers and devices can be infected with ransomware.

What to Do If You’re Attacked

Slip-ups happen. Take these steps to protect your business, report the attack, and get back up and running as soon as possible.

1. Disconnect infected computers or other devices from your network.
2. Notify staff and customers who might be affected since they could be at risk of identity theft. In the U.S., disclosure is required by law.
3. Contact authorities, such as your local FBI office.
4. Keep your business up and running using back-up data.

Cyber Insurance for Small Businesses

Mistakes happen. Employees slip up and fall for phishing and ransomware scams. Don’t let your business suffer as a result. Get in touch with C&S Insurance today for a quote on cyber insurance for your business.