Movies always have this whole dramatic scene where parents get a “call” or “letter” from kidnappers with ransom demands when they have your kid. Parents cry, police get involved, and then comes this whole back and forth while the good guys go after the unsuspecting criminals, only to lead into this awesome fight scene and dramatic save. How cool would that be if this truly happened in real life?
Sadly, real life is not all the glamor that Hollywood cracks it up to be. Most often, criminals get away, or financial loss still impacts the person or business. Today, we are going to talk about the number one rising crime in today’s business world, and how Cyber Crimes can affect you and your business.
So why did we talk about kidnapping originally? For most business owners, your business is your child. It’s your life that you put blood, sweat, and tears into. So how would you feel to come into work and all your systems are locked, files encrypted, and you receive notice that your business is being held ransom by criminals? When a cyber ransom happens, the criminals have your whole livelihood in the palm of their hands.
In the fourth quarter of 2021, the average cyber ransom was $322,168. Up over 130% from the third quarter. How many businesses have that kind of cash sitting around, waiting to be used on a ransom to get your business back up and running? Not many. Many small businesses might look at that number and think that their business isn’t large enough to warrant that ransom. Remember, this was the average. One large “fish” brings that number up.
Businesses under 100 employees make up about 44% of all cyber claims. If you increase that to up to 1000 employees, the number jumps to 82%. These types of business are the “low hanging fruit” for the cyber criminals as they are large enough to make their crime worthwhile, but not large enough to have their own tech division to combat cyber-attacks. Now, we have only talked about ransom so far as that is typically what hits the news. “Large department store hit with cyber-attack, held to $5mil ransom” etc. are the headlines you see almost daily. What you don’t see is the additional costs outside of the ransoms. The average business interruption case is 20 days to resolve a cyber-crime. That is 20 days of no income. Also, you have the costs of investigation, lawyers to handle your PR, cost to inform all your clients that their data was stolen. All of these add up. The average data breach cost in 2021 rose to $4.42 million.
Now before you panic and start hyperventilating into a brown paper bag, know that there are ways to mitigate and transfer the risk of a cyber-attack. Getting your policy and procedures in place help with limiting response time, purchasing a cyber insurance policy can help with the ever-increasing cost of a cyber-attack. We here at Rothenberger Insurance are working to help guide our clients on the best ways to protect themselves, their business, and their livelihood from cyber criminals.