Cyber extortion

Cyber extortion is an online crime in which hackers hold your data, website, computer systems, or other sensitive information hostage until you meet their demands for payment. It often takes the form of ransomware and distributed denial-of-service (DDoS) attacks, both of which could paralyze your business.

Cyber extortionists have several common techniques for breaking into your computer hardware, software, and networks and incapacitating them until you pay a fee.

One tactic is ransomware, which involves a hacker tricking one of your employees into clicking on a link or file within an email message. This activates the ransomware, which spreads throughout your network, encrypting your servers and data so you can’t access applications and files. The only way to restore access is to pay the hacker for an encryption key.

So-called distributed denial-of-service (DDoS) attacks involve hackers using a network of infected computers to send an overwhelming flood of messages to your web server, which effectively takes it out of service until the messaging stops.

Cyber insurance provides coverage to mitigate the financial impact of these attacks.

Any business that relies on a website to generate sales, such as an e-commerce business, is susceptible to cyber extortion. All IT and tech companies should guard against this possibility.

If your business operations rely on digital tools, online customer management software, or internal applications, you are also vulnerable to cyber extortion.

Similarly, if you rely on access to your customer database and customer relationship management system (CRM), then every hour you can’t access this data is an hour of dead time. After several hours, your company could suffer a major financial loss.

Many cyber insurance policies cover cyber extortion through first-party cyber liability coverage, which provides financial support for three purposes:

• To meet a hacker’s ransom demand
• To pay for extortion-related expenses, such as hiring a consultant to remediate an attack
• To bring damaged computer hardware or databases back to their original working condition

Following cybersecurity best practices is essential. Here are a few key strategies:

• Maintain an effective firewall and install antivirus software
• Train staff on email hygiene (i.e., don’t click links in the body of unknown emails or open attached documents or applications)
• Avoid clicking on pop-up ads while working on the internet
• Maintain multiple backups of all your data

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