How a Ransomware Attack Can Destroy a Small Business
Small businesses are now the frequent targets of ransomware attacks. This surge can be attributed to various factors, such as small businesses not adequately investing in cybersecurity and are likely to pay a ransom.
The ransomware attacks have costlier devastating consequences on small businesses and their stakeholders.
What is A Ransomware Attack?
Ransomware is malware that restricts access to data, assets, and information that are critical to daily operations until a ransom is paid.
Generally, a ransomware attack locks the target devices or encrypts data in the devices. The ransomware also specifies how the ransom is paid – usually through cryptocurrency. The affected business risks losing its data if the ransom isn’t paid. Besides losing data, ransomware attackers coerce small businesses to pay up by threatening to leak sensitive data online. Threat actors use phishing as the common attack vector when targeting small businesses with ransomware.
Devastating Effects of Ransomware Attacks on Small Businesses
Ransomware attacks pose a greater risk to small businesses. These businesses can be impacted through;
Ransom Payment
Ransom for small businesses ranges from a few thousand to a hundred thousand dollars depending on the business type and encrypted data.
The cost of ransom can severely affect business processes and various stakeholders, especially if a business has thin margins. It is even costlier if the business doesn’t have the means to fund the ransom. Sometimes, a ransom can be made, and the data is not recoverable.
Small businesses are usually advised not to pay the ransom since it encourages more attacks. However, a ransom is their way out when small businesses have no option. It is cheaper compared to losing data.
Reputational Damage
Organizations, including small businesses, must report or notify relevant stakeholders when a high-risk cyber-attack such as a ransomware attack has occurred. This helps to reduce further attacks, minimize losses, comply with regulatory obligations, and even help other organizations to defend against a similar attack.
However, this is a double-edged sword since it erodes trust and causes reputational damage. Bad reputation results in loss of sales, customers, partners, and reduced profits.
It also makes it hard for the business to get new stakeholders. Consequentially, the business will incur further costs for building good PR through channels such as the media.
Legal Penalties and Regulatory Fines
Small businesses may face non-compliance fines from various regulatory bodies. This depends on the type of data affected in case a ransomware attack causes a breach. Affected stakeholders may also claim compensation if they suffer severe damages. These fines and penalties can further harm a business already reeling from the ransomware attack. If the business survives, it may face some regulatory bans that may affect its operations.
Business Closure
A ransomware attack can severely cripple small businesses, and the resulting consequences will force them to shut down in the following months.
Usually, a ransomware attack halts most business processes and operations. Also, if the business cannot recover its critical data, it won’t be able to stay in the market. A small business will likely lose revenue and its stakeholders during this downtime period. A small business may also go bankrupt after dealing with a ransomware attack
Business closure is usually imminent due to financial loss caused by the attack. This includes ransom payment, reputational damage, and regulatory fines and penalties.
Measures Smaller Businesses Can Take Against Ransomware Attacks
Small businesses can take measures to prevent ransomware attacks and even reduce the risk if the attack occurs. They include;
Ransomware protection and prevention strategies
A comprehensive cybersecurity plan with ransomware protection strategies is a must for small businesses.
It beefs up security, ensures cyber-aware employees, and allows for backups. It also reduces the attack surfaces, provides correct configurations, specifies how updates are done, and encompasses best cybersecurity practices.
Incident response plan and recovery
Small businesses should have a rapid incident response team with an effective response and recovery plan. This ensures faster recovery and thus reduces the risk and impact of a ransomware attack.
A good incident response plan should specify a response strategy, roles for the response team, how to contain the attack, and communication procedures for the organization and other stakeholders.
Cyber liability insurance
Small businesses should opt for an insurance policy that covers losses that result from a ransomware attack. Most policies offer coverage for ransom, compliance, downtime, recovery, and other expenses a small business might incur in case of an attack.
Conclusion
Ransomware attacks are getting more sophisticated each day. Small businesses need to be prepared to prevent and reduce the impact caused by ransomware attacks.
