Cyber insurance for ransomware attacks

What is ransomware?

Ransomware is a type of malware where a computer’s content is encrypted and a ransom is demanded by a cybercriminal to decrypt it. It is often distributed through phishing emails, and can get onto your computer in the same way as any other malware.

The attacker may claim that the computer is locked due to illegal or questionable conduct by the user.

Ransomware can:

• Prevent you from using your system by encrypting your network or data
• Stop you from running certain applications

It can be very difficult to decrypt the files without the original encryption key used by the attacker.

Similar to ransomware is cyber extortion. Instead of making a ransom demand in exchange for a decryption key, the attacker will threaten to release data publicly unless a payment is made. This is critical for companies that handle sensitive information.

What does ransomware insurance cover?

Depending on your exact policy, ransomware insurance can cover you for:

• Ransomware payment demands resulting from a network security breach
• Lost business income during the restoration of your network
• Data recovery or replacement
• Liability for third-party damages if sensitive data is leaked
• Public relations due to reputational damage
• Notifying affected individuals
• Digital forensics and incident response to identify how the breach occurred 
• Regulatory fines and penalties

Tips on preventing ransomware attacks

There are many simple, common sense precautions businesses can take to help reduce their vulnerability to ransomware events:

• Update your software regularly. Software updates include security patches to protect against the most recent cyber threats, which will keep your system more secure.
• Anti-virus software. Use the latest anti-virus software and update it regularly. Each update includes protection from the most recently known malware and viruses. Keep your firewall updated and patched to prevent threats before they enter your network.
• External, cloud, or offline backups. Regularly schedule routine backups of your data and files to an external hard drive or cloud storage. Make sure these are not kept connected to the computer and are stored separately. This can help you keep your information secure if you are locked out of your computer and unable to recover encrypted files. Regularly test that you can retrieve data from your backup source.
• Cyber training. Informing staff about the threat of data breaches from phishing emails and unsecure sites can help lower the risk of ransomware slipping through network security vulnerabilities.
• Multi-factor authentication. Using MFA adds an extra layer of login security, helping protect your online servers against hackers and unauthorised users.

Need help with insurance for cyber incidents?

Our brokers can work with you to create a tailored, cost-effective cyber insurance policy that helps your business recover from malicious cyber events. With connections to cyber insurers worldwide, we have cyber risk management solutions for any size of New Zealand business.