Last month, CDK Global, whose software is used by auto dealerships worldwide, fell victim to a sophisticated ransomware attack that severely impacted its operations. The cybercriminals behind the attack successfully breached CDK Global’s systems, encrypting critical data and rendering many of its services inaccessible. The attack disrupted operations for approximately 15,000 dealerships relying on CDK Global’s platforms for essential functions like inventory management and customer transactions.
The ransomware attack not only encrypted sensitive data but also prompted CDK Global to engage in negotiations with the attackers over ransom demands. This incident highlighted the evolving tactics of cybercriminals and the potential ripple effects on businesses across sectors. Troublingly, cyber-attacks on businesses continue to increase in both frequency and sophistication. Recent larger targets have included healthcare providers, healthcare networks, and software manufacturers, but no industry or business is safe from the threats of increasingly savvy hackers.
The CDK attack emphasized the critical need for robust cybersecurity defenses, including timely backups, network segmentation, and employee training on recognizing phishing attempts. But in addition to proactive cyber-defenses, businesses should have cyber insurance in place for instances when defenses alone are inadequate. The thought of spending more on insurance is never popular, but in the case of cyber insurance, it is a no-brainer. The average cost of a data breach had steadily risen over then past ten years rising as high as $9,480,000 in 2023.
Contrastingly, premiums for cyber insurance for small businesses averaged less than $150.00 per month for the same time period. The size of a cyber loss or the cost for cyber coverage obviously varies widely depending on the business type, business size, industry, and type of attack, but whichever way you slice it, cyber insurance makes sense.
The CDK Global ransomware attack serves as a stark reminder of the persistent and evolving cyber threats facing modern businesses. It underscores the importance of proactive cybersecurity measures and incident response plans to mitigate risks and ensure continuity in the face of such malicious activities. Swarts Manning has a team of trained cyber specialists who can answer your cyber security and insurance questions and help you protect your business from evolving cyber threats.
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