As we are all aware, the COVID pandemic brought us a dramatic rise in working remote. In fact, 2020 saw 70% of Americans working remotely. Over a year later, that trend is not going anywhere. The majority of businesses say they intend to continue allowing remote work indefinitely and the majority of employees are happy with this new arrangement. However, remote work does have its downsides.
Other than home distractions, there is also the fact that many remote employees are using their personal devices. They often do not have the same security measures that company devices have. Other issues are that data is often shared across multiple cloud apps and cloud services, and IT departments are unable to see security weaknesses in employee’s homes. Remote work has left the door wide open for a significant increase in cyber attacks.
Ransomware is on the Rise
In 2020, daily ransomware attacks increased by 50%. That percentage equates to a ransomware attack every 10 seconds. Recently, the largest attacks have been on the Colonial Pipeline, to the tune of $4.4 million, and the attacks on JBS with the largest reported ransom payment of $11 million; and finally the largest reported ransom demand of $50 million which was made to Acer. The cost of cyber attacks is nothing to take lightly. In 2019, damages due to cyber crime was $4 billion, however that’s expected to climb to $28 billion in just 6 years time.
Ransomware is the most common method of attack. Damages due to ransomware are astronomical. In 2015, these damages cost $24 million, but in 2020, that number climbed to an unbelievable $170 billion.
Small to midsize businesses are underprepared for these attacks. In the past year 45% of these businesses (SMBS) say their cyber security is ineffective, and sadly, 60% will go out of business within 6 months of a data breach. Security “best practices” are simply not enough to help SMBS get back on their feet after such an attack. Just one successful cyber attack can result in the loss of money for ransom, privacy, productivity, and reputation. Without a safety net to help restore balance, it’s all too easy for SMBS to fail.
In addition to strong cyber security measures, cyber insurance can help SMBS to get back on their feet. Although cyber insurance doesn’t encompass all the losses and damages due to cyber attacks, they do usually pay up to $1 million in damages. Cyber insurance covers profit losses, including reputation damage and halted operations; liabilities, including contract penalties and media fines; and lawsuits, including class-actions and regulatory investigations.
Although cyber insurance isn’t a complete or perfect solution to protecting against cyber attacks and damages, it can mean the difference between a business staying afloat or drowning completely.