Ransomware is one of the most prevalent types of cyber threat around today, impacting more and more businesses in recent years. Ransomware attacks have become more accessible, with Ransomware as a Service (RaaS) enabling cybercriminals with no-coding skills to conduct attacks, while the rise in remote working has also increased the number of potential entry points in a business’s IT environment that can be exploited.
However, while ransomware is a known threat that can bring a business to a grinding halt, ransomware also has direct legal implications for businesses. This piece explores these implications and how you can secure your business and minimize cyber liability exposure from ransomware attacks, as well as other cyber threats.
What is Ransomware?
Ransomware is a type of malicious software that is used to lock down access to files and data by encrypting them, rendering them inaccessible. A ransomware attacker does this in order to extort a ransom from the victim, and this can be particularly effective on businesses, as they stand to lose large amounts of time, money, and reputational and legal consequences from being shut down by a ransomware threat.
How Do Business Ransomware Attacks Work?
Ransomware attacks on businesses will usually begin with a successful phishing email or a security vulnerability in the network. In both cases, the attackers are able to inject malicious ransomware code into the business’s devices; like a virus, the malware can quickly spread across files, databases, and applications, eventually bringing a business to a grinding halt.
When users try to access these systems, they will see a notification or displayed message with the ransom demand on it in exchange for returned access. Some businesses agree to the demand although this is never recommended; there is no guarantee the attackers will make good on their promise, and often some of the restored encrypted data is permanently lost in any case.
So how does ransomware relate to cyber liability? How can a business fail to adhere to its legal responsibilities on data protection?
Ransomware and Cyber Liability
Most countries today, including the USA and states like Virginia, have data protection legislation in place to protect citizens’ sensitive personal and financial data. Regulations such as HIPPA, Virginia’s own VCDPA legislation, and the EU’s GDPR are just some of these regulations.
These regulations stipulate a range of requirements; they generally mandate that businesses have cyber security measures, processes and policies that ensure:
- Sensitive personal and financial data is accessed by authorized parties only
- That personal data is processed lawfully (e.g with the person’s consent, for necessary purposes only, and it is stored and shared securely)
- That businesses implement risk-mitigations against potential data compromise
- That businesses can ensure the rights of data subjects can be upheld at all times – this is often a particularly important reason for having a data backup and recovery solution in place
Not only can a business get into trouble with regulators that enforce these legal requirements, legal breaches can also lead to lawsuits from affected data subjects. When defenses that meet these requirements are not in place, it can lead to a range of risks materializing, such as:
- Data loss and theft
- Fines from regulators
- Reputational damage
- Higher insurance premiums
- Litigation costs
Ransomware can materialize these risks; alongside direct damages to the business, the legal risks also can lead to damages through the ransomware software stealing or destroying sensitive data, and compromising of third parties, including partner businesses. Crucially, for the unprepared business, a ransomware attack can show how unprepared it was, revealing any negligence on their part.
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Defenses You Can Put in Place Against Ransomware
The key to defending against ransomware is to take a holistic and multi-layered approach to it. There are a range of defenses you can put in place to lower the chances of ransomware compromise, its potential effect, as well as the legal liabilities and risks that arise from not having appropriate defenses in place.
User Awareness Training
Especially through phishing attacks or unsafe browsing on the internet, ransomware often gains entry into a business’s network through human error. A user may click on a malicious link or provide sensitive information that leads to account credentials being compromised.
A powerful way to lower your cyber risks is to conduct user awareness training; this will give your team the know-how and practical experience they need for recognizing and dealing with cyber threats effectively.
Data Backup & Recovery
A reliable and regular data backup solution that is easy and fast to recover, enables businesses to more or less side-step ransomware threats, as they will be able to restore backups of the encrypted data and minimize the operational, financial and reputational costs involved.
A business without a data backup and recovery solution is much more at the mercy of a ransomware threat; it provides an invaluable safety net that not only secures the business, but also enables it to meet the data retention and access requirements of data protection regulations.
Patch Management Solutions
Vulnerabilities can arise from outdated software and hardware, making them a potential entry point for a ransomware attack. A streamlined way to mitigate this risk is to use a patch management solution, which will make it easier to track and regularly enforce system updates across your IT environment.
Implement Device and Network Security Measures
Keep your devices and the connections between them secure by using defensive measures such as network firewalls, installing antivirus software, and network intrusion detection and prevention systems across your business.
These measures will give your business more cyber immunity and bolster its implementation of meaningful measures to prevent cyber compromise, which will also decrease the legal liability risks your business faces.
Develop an Incident Response Plan
An incident response plan gives your business a strategy for responding to cyber incidents, including cyberattacks. These plans will help your business to lower the potential damage of a cyber incident, and empower its compliance with data protection regulations.
An incident response plan will have contingencies and defined action plans in place, spanning a range of different incident scenarios such as the failure of a server, or a ransomware attack for example. These plans could include steps for isolating infected systems, notifying affected stakeholders, incident investigation measures, and backup restoration plans.
A managed service provider can help your business to design and implement a comprehensive incident response plan, giving your business robust cyber resilience.
Take Out Cyber Liability Insurance
Cyber liability insurance provides a safety net that covers some of the costs in the event of a cyber incident such as a ransomware attack. The insurance can include payouts for legal fees, recovery costs and fines.
However, it’s important to note that a business with a generally lower cyber risk profile will be able to take our insurance at lower premiums, as well as ensure that in the event of an incident, there is no discovered breach of the agreement that could lead the insurance provider to not honor the payout.
Ransomware is one of the most common cyber scourges that effects businesses today. Not only can it cause a lot of damage to businesses, they can also lead to legal consequences with regulators and the parties protected by data protection laws. These include federal and state-level laws such as Virginia’s VCDPA.
A business with insufficient security measures, processes and policies in place has a higher level of cyber liability risk, which goes hand in hand with cyber risk more broadly. But, by investing in robust IT support and cyber security measures, they can not only improve performance and security, they also invest into systematically lowering the operational, financial and legal risks that they face.
With cyber security becoming a norm for ensuring continuity and meeting the needs of customers and regulators alike, investing into protection against ransomware and other cyber threats today is now a crucial investment for any businesses seeking to drive sustainable growth.
Infinity Technologies – Robust Cyber Risk protection for Virginia Businesses
From our home in Fredericksburg, Virginia, Infinity Technologies helps businesses reinforce their digital systems and build resilience against today’s growing cyber threats. Our strategic approach to cybersecurity unites people, processes and policy, to create robust security frameworks that account for every digital risk and vulnerability.
To begin your journey towards a stronger cybersecurity posture for your business, get in touch today for a cyber liability review. This will help you evaluate your current defenses, and provide actionable guidance on how you can better manage cyber risks.