Cyber Extortion & Insurance

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It seems like nearly every day some cyber crime makes front page news. Criminal cyber activity is on the rise across the United States, and no business or non-profit organization is safe from hackers. Cyber extortion is one of the most common types of cyber crimes that businesses need to be aware of. According to the FBI, costs associated with cyber extortion techniques like ransomware hit an all-time high last year.

What is Cyber Extortion?

Cyber extortion occurs when hackers access your sensitive data, including customer information and trade secrets. They hold this valuable information “hostage” in return for a sum of money. Hackers threaten to release this information to the public if you don’t comply with their demands.

Ransomware is a newer type of cyber extortion. In these cases, hackers download malware onto your computers or website locking you out. To remove the malware and regain access, your business is forced to make a substantial financial payment.

Cyber Extortion Examples

Some businesses think cyber extortion won’t happen to them. Here are some common scenarios where small businesses can become the victim.

  • Do you sell products online? Either from a warehouse or your kitchen table? Cyber criminals shut down these types of businesses everyday by downloading malware on a website or flooding it with too much traffic. As a sales business, you need your website up and running to make a profit. Can you afford the $10,000 demand that comes with an attack like this?
  • Many businesses store client information on the cloud or a server in their office. What happens when a cyber criminal steals client information including social security numbers and credit card information? Many times they demand thousands of dollars to return the information instead of publishing it online. And breach of client records can force a business to pay thousands of dollars in mandatory reporting costs.

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How can you Protect Your Business?

While nobody has found a way to eliminate 100% of criminal cyber activity, businesses can protect their operations and bank account from the full impact of attacks like cyber extortion. Cyber Liability insurance protects businesses from cyber and data breach claims including cyber extortion.

The best cyber liability insurance policies cover costs associated with:

  • Investigating the breach
  • Hiring an attorney to defend you
  • Public relations
  • Notifying those impacted
  • Loss of revenue
  • Program or data repair
  • Credit checks for those impacted
  • Banking or credit card expenses
  • Complying with all state reporting laws

One of the best decisions you can make to protect your small business from cyber crimes is to purchase cyber liability insurance.