What is ransomware insurance?
Ransomware insurance helps cover expenses resulting from ransom, extortion and other cyberattacks.
A ransomware attack on your company’s data can make you feel helpless. That’s where ransomware insurance can save the day. While ransomware insurance can’t stop a cyberattack, it can help with expenses resulting from ransom, extortion, and more, which can mean the difference between staying in business or shuttering your doors.
No business is too small to be at risk of cybercrime, and the consequences can be devastating. Read on for more about what ransomware is, what ransomware insurance covers, and how it fits within a cyber liability insurance policy.
Ransomware is malicious software that prevents users from accessing an infected device or file until you pay a ransom. You or an employee can unknowingly introduce ransomware into your network by clicking on a malicious link in a phishing email, through a corrupt ad, or by visiting an infected website.
Typically, malware installs itself silently without your knowledge. Depending on the sophistication of the malware, you might get a pop-up with instructions on how to buy a decryption key to regain access to your company’s files. In other instances, you won’t be able to access your computer system at all after a ransomware attack.
Ransomware cyber insurance, also known as cyber extortion coverage, is typically included with a sublimit under a cyber liability insurance policy. The sublimit puts a cap on payments stemming from the ransomware portion of your cyber liability insurance. For example, a $1 million cyber liability insurance policy could have a ransomware sublimit of $25,000.1
Policy specifics often hinge on a company’s risk profile based on its ransomware exposure. For example, do you have a digital security plan in place? Have you taken steps to reduce your risk of a ransomware attack? If so, your premium cost will likely differ from that of a company with no defenses in place.
When looking for the ransomware insurance policy that is right for you and your business, remember that it is rarely its own form of coverage. It’s almost always an add-on to a cyber liability policy.
Most ransomware insurance policies will provide coverage against some or all of the following:
Not all ransomware attacks are reported, but 27% of companies that reported an attack have paid a ransom, according to a recent report by the Institute for Security and Technology.2 It’s important to note that the ransomware insurance provider typically needs to greenlight a ransom payment before it’s made. So if you jump the gun and pay a ransom before notifying your insurer, they may not reimburse you.3
Cyber liability insurance is the broader coverage policy form that may also include ransomware insurance coverage. Typically, it includes both first-party and third-party coverage in the case of a data breach:
Nobody wants to feel helpless. Cyber liability insurance can help you rest easier knowing that you’ve taken action to reduce your exposure to cyber threats.
To get ahead of threats to your business, you need to move fast. That’s why you need small business insurance from Thimble. Click “Get a quote” or download the Thimble mobile app, answer a few questions about your business, and you can get business insurance within minutes.