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Ransomware Attacks and Cyber Insurance

Ransomware attacks encrypt or lock systems, leading to major data loss, financial harm, and reputational damage. Preventive measures and cyber insurance help protect businesses by covering ransom payments, recovery costs, legal issues, and downtime losses during such incidents.

  • 29 Aug 2025
  • 5 min read
  • 3 views

These days, data has become an invaluable asset for businesses. With every company relying heavily on the internet and computers to transfer, manage and store information, the risk of data theft has increased. Data breaches can be in various forms, and among them, one of the biggest dangers is ransomware attacks.

What is a ransomware attack?

Ransomware attacks are a sort of cybercrime where hackers block access to the data or computer, steal all the crucial files and then demand a massive amount to release them. The hacker might also threaten to leak or delete the data if the ransom is not paid.

How ransomware works?

The ransomware attacks take place via infected websites, fake software downloads or phishing emails. Here is a brief breakdown:

  • Delivery: A hacker sends you a fake link or email attachment with a hidden virus.
  • Infection: When you click on it, the virus automatically installs itself quietly.
  • Encryption: The virus then locks the data or the entire system using a special code.
  • Demand: A message demanding ransom to get back the data shows up.
  • Loss or payment: You either pay the ransom or lose the data forever.

Some of these attacks can also spread across a computer network and then compromise all the systems linked to it.

What are the types of ransomware attacks?

You will encounter many sorts of ransomware attacks, and each of them functions differently. Here are the most typical ones:

Crypto ransomware

These attacks encrypt the files on your system. You will be able to see the files, but won’t be able to access them. Hacker demands payment for the decryption key.

Locker ransomware

This locks the computer screen entirely and you cannot use the device at all. It displays a ransom message with a timer.

Scareware

It displays bogus warnings, such as “your system has been infected. Pay ₹50,000 to get it cleaned. This tricks the users into paying for a fake antivirus software.

Leakware (Doxware)

This threatens to leak all your business or personal data online if you don’t pay. It mostly targets companies that have sensitive information.

Mobile ransomware

This type of attack targets mobile phones and locks the entire phone or steals its information.

Real ransomware attacks in India

Ransomware attacks are occurring frequently in the nation, especially because many businesses have become digital. Here are some real-life cases of these attacks:

AIIMS Delhi (2022)

In 2022, a ransomware attack took place at Delhi AIIMS, causing the hospital’s servers to be down for more than 10 days. The lab reports and critical patient data became completely inaccessible. To give back the access, hackers demanded ₹200 crore in cryptocurrency.

Oil India Limited (2022)

Oil India Limited is a major public sector enterprise in Assam that experienced the ransomware attack. It had a severe impact on the business operations. All the systems had to be temporarily shut down. The hackers demanded $ 7.5 million.

Maharashtra Cyber Department warning (2023)

The government sent out an alert after it witnessed an increase in ransomware attacks on academies and even small businesses.

Impact of ransomware attacks on businesses

Ransomware will not just lock the data; it can also destroy businesses. Here’s how they do so:

  • Monetary loss: Paying off the ransom, hiring specialists and fixing the systems can cost lakhs and even crores.
  • Data loss: Some sensitive files cannot be recovered.
  • Damage to reputation: Consumers will lose trust if their personal information gets leaked.
  • Business downtime: Work will stop for days or weeks. This leads to a loss of productivity.
  • Legal issues: Many organisations might experience penalties under the data protection laws if client data is leaked.
  • Emotional stress: Employees and even owners go through fear, pressure and panic.

Small businesses are more powerless because they sometimes don’t have proper backup plans or IT teams.

Best practices to prevent ransomware attacks

When it comes to ransomware protection, prevention is an excellent option. You should follow these easy steps to protect yourself:

  • Don’t open unknown links or attachments.
  • Store all your data in cloud storage or external hard drives.
  • Keep the antivirus and operating system updated.
  • Always use good and strong passwords.
  • Use firewalls as they safeguard the network from unauthorised access.
  • Teach all employees how to identify emails.
  • Use a security software that blocks such threats.

Features in cyber insurance to protect against ransomware attacks

Even with all the precautions, cyber attacks can still take place. That’s where you need a cyber insurance policy. It will help in recovering losses and also help you get expert assistance during a ransomware issue. The policy contains the following features:

  • Covers the ransom funds if you want to pay.
  • Covers the cost of retrieving or restoring the lost data.
  • Compensates for the funds you lost while systems were down.
  • Pays cybersecurity specialists to uncover how the attack took place.
  • Covers all legal expenses if the customer data gets exposed and leads to lawsuits.

Conclusion

Ransomware attacks are dangerous and real. However, you don’t need to live in fear. When you have the correct knowledge, cyber policy and strong cybersecurity habits, you can safeguard your data and business easily from huge losses. The cyber policy will offer legal support, cover costs for data recovery and ransom payments. The liability insurance will protect you from claims if a consumer or client's data gets leaked because of a system breach. You must always remain alert, educate your employees and keep backups.

FAQ

  1. Is ransomware only a threat to big enterprises?

No. Individuals, academies and even small businesses can become a target.

  1. Do I need to pay the ransom if attacked?

No. It’s because there is no guarantee that your data will be restored.

  1. How much does cyber insurance cost in India?

The cost of cyber insurance depends heavily on the type of user and coverage. For individuals, plans begin from ₹500 per year. For business, it varies based on the risk and size.

  1. Can I get a cyber policy for personal use?

Yes. Many insurance firms offer individual cyber plans these days.

  1. What to do after a ransomware attack?

You should disconnect the system from the internet, don’t pay the ransom and contact the local police cyber cell.


Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.

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