The digital revolution has been a boon to businesses across many industries. Companies of all shape and size benefit from their ability to store large quantities of information on their computers and the internet. Yet with these new benefits comes a major drawback: the rise of cyber crime.
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Increase In Ransomware Attacks
In 2020, daily ransomware attacks increased by 50%. No doubt this is partially attributable to the major increase of remote work. 70% of Americans worked from home in 2020. With more people working online, the risks of a cyber attack increased exponentially. Data would be shared across multiple apps and cloud services, increasing its vulnerability. IT departments have fewer ways to catch security weaknesses in workers’ homes. In addition, remote workers are likely to use personal devices, which often have lower security standards than their company may want.
In the new decade, cyber crime is comparable to the 3rd largest economy on Earth, behind only the US and China. Ransomware damages have increased 7,000-fold over the past five years, from $24 million in 2015 to $170 billion in 2020. This year is seeing some of the boldest cyber attacks ever encountered. When Colonial Pipeline suffered its cyber attack, it was the largest attack on a US energy system. Also recently, Acer reported the largest known ransom demand from cyber criminals to the tune of $50 million. No one is completely safe from cyber criminals, not even giant corporations.
Businesses Are Turning To Cyber Insurance
Yet while large businesses also suffer from cyber attacks, these corporate giants can expect to survive the shakedown. Small to midsize businesses (SMBs) don’t always have that luxury. In 2020, 66% of SMBs fell victim to at least one cyber attack. Of those affected, 60% go out of businesses within 6 months after the data breach or attack. The cause of their bankruptcy goes beyond the ransom payment or extortion. Recovery efforts also cost the business money, and when productivity is halted during a cyber attack, the business can’t generate revenue.
To alleviate the costs of a cyber attack, businesses of all sizes are turning to cyber insurance. For SMBs, cyber insurance policies typically cover up to $1 million in damages. Damages can include halted operations, sullied reputations, contract penalties, and even lawsuits. Cyber insurance doesn’t cover everything, but it can curb the worst of the fallout. Cyber insurance may mean the difference between survival and bankruptcy for a small or midsize business.
Infographic source: Clearsurance
