If you’ve never been hit by ransomware, count yourself lucky. For a small and growing business it can be devastating, and it can even force you out of business permanently. In this article we’ll explain why that is, walk through the steps you can take to reduce your risk of being hit by ransomware, give you advice on how to recover from an attack, and highlight the role of cyber insurance in managing risk.
Understanding Ransomware and Its Impact on Small Businesses
Ransomware is a type of malicious software that threatens to publish the victim’s data or perpetually block access to it unless a ransom is paid. Small businesses, often less protected than larger corporations, are increasingly being targeted by cybercriminals using ransomware.
What is Ransomware?
Ransomware encrypts files on a device or network, making them inaccessible to users. Cybercriminals demand a ransom from the victim to restore access to the files upon payment. Common types include crypto ransomware, which encrypts data, and locker ransomware, which locks the user out of their device.
Impact on Small Businesses
The impact of a ransomware attack on a small business can be devastating. Beyond the immediate disruption to operations and potential data loss, there are direct costs such as the ransom payment (if chosen to pay), IT remediation efforts, legal fees, and more. Indirect costs might include lost revenue due to downtime, reputational damage, and loss of customer trust.
Statistics Highlighting the Threat:
- In 2023, ransomware attacks have shown no signs of slowing down, with 1,900 attacks recorded in just four countries—highlighting a global issue. The US alone faced 43 percent of these attacks, underlining the widespread nature of ransomware threats.
- A specific example from 2023 involved the Clop ransomware group attacking MOVEit Transfer and impacting hundreds of organizations and nearly 18 million individuals.
- The financial repercussions are also significant, with small and medium-sized businesses experiencing a notable portion of these attacks. Thirteen percent of all businesses in this category faced a ransomware attack in the past year.
Given these statistics, it’s clear that ransomware poses a significant risk to businesses like yours. The direct and indirect costs can be substantial, potentially threatening your very survival.
Proactive Measures to Protect Your Business
The best way to not become a victim of a ransomware attack is to have more and better security tools and practices in place than other potential targets. Cyber criminals look for the easiest path to getting what they want, so being better prepared than your peers is a big step towards minimizing your risk. Educating your employees, backing up your data correctly, and using the right cybersecurity tools are your biggest defenses against a ransomware attack. Let’s explore how:
Employee Training and Phishing Awareness
- Why It Matters: Employees can be the first line of defense or the weakest link. Training them to recognize phishing attempts and suspicious behavior is critical.
- How to Implement: Conduct regular training sessions. Use real-life examples to show how phishing works. Test employees with simulated phishing emails to reinforce learning.
For a deeper dive on this topic, including best practices for selecting cybersecurity awareness training and making sure you get the most of it, read our comprehensive guide, Selecting a Cybersecurity Awareness Training Program for your Business.
Data Backup Best Practices
- Why It Matters: Regular and secure backups ensure that, even in a worst-case scenario, your business can recover without paying a ransom.
- How to Implement:
Cybersecurity Tools and Software
- Why They Matter: The right tools can prevent ransomware from ever reaching your network or endpoints.
- Recommendations:EDR/MDR: Endpoint Detection & Response / Managed Detection & Response are a category of tools that have the ability to watch over your entire network and connected devices, and respond immediately when a threat or attack is detected. At Arch Access we’re partial to CYDEF as a comprehensive, market-leading MDR with a free 30-day trial. For more information on this topic, check out our comprehensive guide, Does My Business Need an Advanced Managed Detection and Response (MDR) Solution?Firewalls and Antivirus Software: Essential for blocking known threats and scanning for malware. If you are on the market for a tool in this category, this list of firewall solutions and antivirus software can help.Email Filtering Solutions: These tools can catch phishing attempts and suspicious attachments before they reach your employees.
By focusing on these proactive measures, your business can both protect itself against ransomware and builds a culture of cybersecurity awareness.
The Aftermath: Responding to a Ransomware Attack
When a ransomware attack strikes, the clock starts ticking. Here’s a straightforward plan to navigate the aftermath effectively:
Immediate Steps After Detection
- Isolate Infected Systems: Immediately isolate affected devices from your network and most importantly, from the Internet. This will help prevent the spread of ransomware to your other systems. Since many compromised systems end up under remote control of the attacker, isolating it from the Internet will prevent the attacker from being able to use it. Note however that you may at some point need to allow remote cyber forensic experts access to the compromised system.
- Identify the Ransomware: Use available online tools to identify the ransomware variant, as this will guide your response strategy. This is an area where having cybersecurity expertise is invaluable, and if you don’t have an expert on staff you might want to leverage a trusted third party with cybersecurity expertise.
- Secure Your Backups: Ensure that your backups are intact and have not been compromised. If they are offline or in the cloud, verify their security before reconnecting.
The immediate steps after detecting an attack are so critical, we’ve written dedicated guides for many of these topics. For more information you should review our articles, What are the 7 steps of incident response?, and Business Continuity Planning Is More Than Just An “I.T. Thing”.
To Pay or Not to Pay the Ransom
At first glance it might seem like paying the ransom is the fastest path to putting an embarrassing and scary process behind you. However, the decision to pay the ransom is fraught with ethical and practical considerations. Here are key points to ponder:
- No Guarantees: Paying the ransom doesn’t guarantee data recovery. Some businesses pay only to find their data is still inaccessible or corrupted.
- Encouraging Criminals: Each payment fuels the ransomware economy, encouraging criminals to continue their attacks.
- Consult Experts: Before making a decision, consult with cybersecurity experts and consider all options for data recovery.
Involving Law Enforcement and Cybersecurity Experts
- Report the Attack: Notify local law enforcement and, if applicable, national cybersecurity authorities. This can help in tracking down the attackers and might provide you with additional recovery options. You may also have federal, state-level, and industry-specific legal obligations to report a breach. If you’re not sure whether you are required to disclose the breach, our guide, A Small Business Guide to Legal Compliance in the Wake of a Cyber Breach, can help.
- Seek Expert Help: Cybersecurity experts specialize in dealing with ransomware and can offer strategies for data recovery that don’t involve paying the ransom. They can also help strengthen your defenses against future attacks.
Creating a Robust Backup and Recovery Plan
A solid backup and recovery plan is the foundation of any small business’s defense against data loss, including the disastrous impacts of a ransomware attack. Here’s what such a plan should cover:
Defining a Backup and Recovery Plan
- A backup and recovery plan outlines how a business’s data will be saved and can be restored in the event of data loss. This plan should cover the critical data, applications, and systems necessary for your operations. This is harder than it might seem! One way to build this plan is to think about business-critical functions like payroll, email, and others, and work backwards from the perspective of “How would we operate if these systems were gone for 30 or more days?”
Key Elements of the Plan
Regular Backup Schedules
- Routine and Consistent: Backups should occur at regular intervals that make sense for the volume and frequency of data changes. For many, this might mean daily backups.
- Automated Processes: Automate backups to reduce human error and ensure they’re performed consistently.
Secure Storage Solutions
- Diverse Locations: Store backups in multiple locations, including offsite and cloud storage, to protect against physical and cyber threats.
- Encryption and Security: Ensure that backups are encrypted and stored securely to prevent unauthorized access.
Restoration Testing
- Regular Testing: Test backup files and the restoration process regularly to ensure that data can be effectively restored.
- Documented Processes: Have clear, documented steps for the recovery process to minimize downtime in the event of data loss.
Actionable Recovery Steps
- Prioritization: Identify which data, applications, and systems must be restored first to resume operations.
- Recovery Teams: Assign specific roles and responsibilities within your team for recovery efforts.
The Role of Cyber Insurance in Risk Management
Cyber insurance is a critical part of your risk management strategy. Here’s a summary of key points and tips on how you can choose the right policy for your small business.
Understanding Cyber Insurance Coverage
Cyber insurance policies are designed to mitigate the risks associated with online activities and digital operations. These policies typically cover:
- Incident Response: Costs associated with the investigation, management, and remediation of a cyber incident.
- Data Restoration: Expenses related to recovering lost or corrupted data.
- Business Interruption: Compensation for the loss of income during the downtime caused by a cyber attack.
- Legal Fees and Fines: Coverage for legal expenses and regulatory fines that may arise from data breaches.
Why Cyber Insurance is Vital for Small Businesses
Small businesses often operate under the misconception that they are unlikely targets for cyber attacks. However, their typically less robust cybersecurity measures make them attractive targets for cybercriminals. Cyber insurance is a safety net that can help you recover from the financial blow of a cyber attack, ensuring that a single unfortunate incident doesn’t shot your business down forever.
Choosing the Right Cyber Insurance Policy
Here are a few key things to consider when selecting a cyber insurance policy:
- Assess Your Risk: Understand the specific cyber risks your business faces to determine the level of coverage needed.
- Review Policy Details: Not all cyber insurance policies are created equal. Pay close attention to what is and isn’t covered.
- Consider Deductibles: Like any insurance, lower premiums might mean higher deductibles. Ensure the deductible is manageable for your business.
- Inquire About Cybersecurity Requirements: Some insurers offer reduced premiums for businesses that implement certain cybersecurity measures. This can serve as an incentive to strengthen your cyber defenses.
For a more thorough review of cyber insurance and why it’s important for your business, check out our guide Everything You Need To Know and Do to Pre-Qualify For Cyber Insurance. If you’re actively on the market for cyber insurance or coming up for renewal, take our 3-minute self-assessment to see what options are available to you.
Conclusion
The hard truth is, no one is immune from a ransomware attack. If you follow the steps in this guide however, you can make yourself a harder target and you can make it easier to recover quickly from an attack and potentially avoid paying ransom. As a bonus, you might just lower your cyber insurance premiums in the process.
Managing all of this is a lot of effort however, and it takes specialized knowledge and skills. Arch Access is the trusted cybersecurity partner to help you implement the cybersecurity controls and tools like CYDEF that will reduce your risk today, and we’re here 24/7 to help when things go wrong in the future. Contact us at sdeal@archaccess.com to learn more.
Frequently Asked Questions
What is ransomware?
Ransomware is malicious software that encrypts a victim’s files or systems, demanding a ransom payment for decryption.
How does ransomware affect small businesses?
Ransomware can cause significant financial losses, downtime, and damage to a small business’s reputation.
Should a business pay the ransom if attacked by ransomware?
Paying the ransom is risky and does not guarantee file recovery. It’s vital to consult with law enforcement and cybersecurity professionals.
What is the best way to prepare for a potential ransomware attack?
Preparing involves educating employees, implementing strong cybersecurity measures, having a comprehensive backup strategy, and considering cyber insurance.