Defensible Tech TeamJune 16

The Hidden Costs of a Ransomeware Attack

According to 2021 data, the average cost to remediate a ransomware attack cost organizations an average of $1.85 million. In 2021, ransomware attacks nearly doubled from the previous year, skyrocketing by an astronomical 92.7%.

The unprecedented rise in ransomware attacks is due to a number of factors, including the increasing sophistication of hackers and the growing number of devices connected to the internet. With more devices online, there are more opportunities for hackers to exploit vulnerabilities and gain access to sensitive data.

For threat actors, ransomware is a lucrative attack method, and critical infrastructure is a prime target. From oil pipelines completely shutting down for weeks at a time, to water companies finding out they are no longer insurable, to attacks on the software supply chain, the mounting costs of ransomware attacks is simply astronomical.

Defensible Technology Founder & CEO, Steve Doty, shared key insights in a recent webinar with Industrial Defender CEO Jim Crowley, where they discussed the impact ransomware attacks are having on critical infrastructure and private equity firms is. And it’s not just money that’s at stake — it’s a whole lot more.

What Are the Hidden Costs of a Ransomware Attack?

When considering ransomware attacks, many of us only consider the amount of the ransom payment, but that is only a small fraction of the total cost of a successful ransomware attack.

A ransomware attack can potentially cost millions of dollars, adversely impacting the business in a variety of ways.

Lost Revenue

When ransomware strikes, you’re going to lose revenue. That lost revenue may be a direct result of the attack, in that your business continuity will have been upended with some of your systems rendered inaccessible by the malware. The lost revenue may also come from the ensuing fallout of becoming a victim of ransomware.

Ransomware Payments

Ransom payments typically go into a cryptocurrency account, which can be very difficult to trace. While there have been some instances where businesses have been able to recover their data after paying the ransom, paying the ransom is generally not recommended, as there is no guarantee that the attacker will actually provide the decryption key, and even if they do, the experience can be very costly and disruptive for the business. 

In addition, by paying the ransom, businesses are effectively funding the attackers' future operations.

Post-Mortem Investigation

A ransomware attack can have significant business costs beyond the initial ransom payment. The victim company may need to hire forensic consultants to conduct a post-mortem investigation in order to determine how the attackers gained access to their systems and what data was encrypted. This can be a costly and time-consuming process, particularly if the attackers used sophisticated methods to cover their tracks, with most companies impacted by ransomware seeing downtime of anywhere from 2-4 weeks, and sometimes more.

Cyber Insurance Premium Increases

The most expensive cyber insurance is the cyber insurance you are unable to obtain because the risk level within your business is too high to be insurable. If you do fall victim to a ransomware attack, your premiums are going to go up significantly.

In fact, cyber insurance premiums rose sharply in the fourth quarter of 2021 — by 89%.

Technology Hardening

In the wake of a ransomware attack, it is essential to take steps to harden your technology infrastructure. This includes both implementing immediate changes in the wake of an attack and making long-term changes to prevent future attacks. Among the most important immediate changes is ensuring that all systems are patched and up to date.

Keep in mind here that this is more than simply putting together a vulnerability management plan. While it’s true that you can often stay one step ahead of attackers by applying patches to vulnerable systems in a reasonable timeframe, a big part of your technology hardening plan should also include implementing a defense-in-depth strategy.

It is also important to conduct a review of security settings and make any necessary changes. All of these steps, while critical, are going to cost your company money.

Software Updates

If you haven’t kept your software up to date, part of your ransomware remediation plan should include making those necessary changes.

While maintaining up-to-date software is a hallmark of a strong security policy, it still costs your company money. And as the old adage goes, an ounce of prevention is worth a pound of cure. Keeping your systems up to date will reduce your risk of becoming a victim of a ransomware attack.

Legal Costs

Legal fees associated with recovering from a ransomware attack can set the business back by years simply due to the sheer magnitude of the costs, with one company recently reporting $50 million in non-recurring legal expenses associated with an attack.

Reputational Damage

In ransomware attacks on critical infrastructure, reporting the attack is a requirement. Additionally, if the ransomware prevents you from providing services to or accepting payments from your customers, it is going to significantly damage your organization’s reputation. Reputational damage can stem from negative press, regulatory enforcement actions, or service outages that affect clients. All of these forms of reputational damage can affect the way in which your company is perceived by both new and existing customers, potentially hurting your customer renewal rates as well as new customer acquisitions.

Recovering from the reputational damage of a major cyber incident can be a costly endeavor, requiring positive press coverage, new ad campaigns, monetary commitments to customers, and, potentially, even an entire company rebrand, depending on the severity of the incident. All of these initiatives will require additional funds that were likely not accounted for in original budgets, as well as months or years to rebuild public trust. 

Where Can I Learn More About Defending Against Ransomware Attacks?

Defending against ransomware is no easy task. For a full list of recommendations, as well as insightful details into how ransomware impacts critical infrastructure, as well as private equity firms, be sure to watch the webinar, “Why Do Ransomware Gangs Target Private Equity Portfolio Companies?”