Cyber-attacks increase danger of business insolvency
23 May 2022
European businesses are increasingly aware of the threat of a cyber-attack which could leave them insolvent, highlighting the need for specialist insurance cover.
One in five (20%) of businesses across eight countries said that a cyber-attack almost rendered them insolvent – according to the latest Hiscox Cyber Readiness Report.
Besides threatening the viability of a company, cyber-attacks can inflict longer term impacts including diminished business revenue, damage to the brand reputation, loss of key executives and employee layoffs, loss of customers and strategic partners.
The Federal Bureau of Investigation (FBI) has warned that there are now 100 different strains of ransomware in circulation globally.
The World Economic Forum (WEF) has made it clear it views cybercrime, and ransomware as a threat to the global economy and while large organisations suffered high profile attacks in 2021, small and medium sized businesses are also being targeted.
According to the WEF Global Cybersecurity Outlook 2022, more than 50% of respondents indicated that ransomware was one of their biggest concerns when it comes to cyberthreats and 80% stressed that ransomware is a dangerous and growing threat to public safety.
It also highlighted that the cost of breaches to an organisation is high, amounting to an average of Euros 3.4m (US$ 3.6 m) per incident. Another concern to the WEF is the growing trend that companies need 280 days on average to identify and respond to a cyberattack.
Significantly, a Cybereason survey in 2021 revealed that 42% of companies with cyber insurance policies in place indicated that insurance only covered a small part of damages resulting from a ransomware attack.
American based Parachute Technology’s 2022 Cyber Attack Statistics, Data, and Trends report stated that ransomware accounted for 27% of the data breaches involving malware infections last year and 80% of organisations that paid a ransom were hit by a second attack - almost half were hit by the same threat group.
Colonial Pipeline, which is responsible for transporting nearly half of the East Coast’s fuel in the US, suffered one of the most high profile attacks las year. Colonial Pipeline paid the requested ransom of Euros 4.2m ($4.4 m) with the assistance of the FBI.
Experts have noted that ransomware gangs have been shifting their focus to managed service providers (MSPs) by exploiting poorly secured remote access tools. With remote working now more common following the impact of the pandemic, there will remain an inherent vulnerability that cyber criminals will continue to exploit.