Ransomware can be an expensive problem. One study showed the average cost of remediating a ransomware attack in the US is more than $622,000. Of course, costs can go much higher; the costs of recovery from a ransomware attack on the city of Atlanta were expected to reach $17 million.
Sources of Ransomware Costs
There are several sources of the financial costs of ransomware. They include:
1. Lost revenue.
Ransomware can make it nearly impossible for a business to function, losing revenue due to the inability to place and process orders. Given that ransomware typically causes downtime for more than a week, this can be a significant financial impact.
2. Lost productivity.
Like any downtime, an outage caused by ransomware prevents employees from working at maximum efficiency. This loss of productivity means it costs more to get the same amount of work done.
3. Paying the ransom.
Although it’s not generally recommended, many organizations find it necessary to pay the ransom to recover their data. This cost may be covered by cyber insurance, but in some cases it will come out of the company’s financial reserves.
4. Recovery costs.
Whether or not the ransom is paid, there are likely to be costs to restore systems. Businesses may have to pay for technical services and for costs such as data transfers out of the cloud.
5. Third-party claims and intellectual property loss.
Some new variants of ransomware don’t just encrypt data; they also steal it and threaten to reveal it. Any data exposed as a result of the breach leave the business vulnerable to claims from third parties. If the stolen data includes intellectual property, businesses may lose its value if it becomes public.
6. Legal costs and fines.
Businesses may need to hire attorneys to ensure their response to a ransomware attack complies with laws regulating data breaches. In addition, there may be penalties and fines for failing to protect data.
7. Reputational damage.
Hardest to quantify is the cost of the loss of trust and damage to the brand’s reputation.
The best way to avoid these costs is by preventing a ransomware attack through strong security measures. However, as with all malware, there is no 100% effective protection, and the most effective way to minimize ransomware costs is to have an efficient recovery process that minimizes the associated downtime.