Insurance Companies Start Refusing to Ransom Coverage As Average Amounts Demanded Cross $800,000

Suffering from a ransomware attack can be truly disastrous for a company because of the fact that this is the sort of thing that could potentially end up locking their valuable data unless they pay the demanded sum. Many companies assume that paying the ransom is the easiest way to get through this situation, since the malicious actors behind these attacks usually claim that they will hand over data access back as soon as the ransom is paid.

With all of that having been said and now out of the way, it is important to note that this might not be a good idea. Numerous companies that paid the desired ransoms ended up suffering from repeat attacks by the same malicious actors who left exposed vulnerabilities that they could use as backdoors. With the proportion of companies that suffered ransomware attacks increasing to 66% in 2021, which is a massive increase from the 37% that said the same in 2020, many insurance firms are refusing to cover ransom payouts.

An interesting thing to note here is that many of the organizations that paid the ransom didn’t technically have to since they had data backups that they could have reverted to. However, this might take too much time, and there is always the risk that encrypted data could end up in public forums if the ransom is not paid, which explains why so many companies decide to bite the bullet with all things having been considered and taken into account.

In spite of the fact that this is the case, paying the ransom usually does more harm than good. 40% of ransoms were paid by insurance providers, which is a decrease from 44%. Ransomware insurance was starting to pick up steam as an industry, but the lack of benefits of paying ransoms is starting to become quite clear and people are moving away from these solutions. Average ransom demands have now crossed $800,000, with 11% of companies paying over a million to get their data back which is almost triple the 4% that did so in the year prior.

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