Although cyber insurance can assist in reducing the expenses associated with malicious cyber attacks, it may not always be sufficient to cover the total cost. According to Moody’s, the cyber attack that occurred in Baltimore in 2019 resulted in a cost of over $18 million, and the 2018 attack in Atlanta caused the city to incur a cost of more than $17 million.
It’s becoming increasingly difficult and costly for smaller governments to obtain insurance policies. In recent years, there has been a surge in attacks and increased loss rates, causing premiums to skyrocket. For instance, Horry County, S.C. experienced a 300% increase in rates, with costs rising from $70,000 in 2021 to $210,000 in 2022, according to a report.
Insurance companies are enforcing stricter measures on local governments to ensure they follow the best practices in managing cyber risks. Municipalities are obliged to implement multifactor authentication and incorporate extra security measures such as firewall protection, employee training, and data backups to qualify for coverage.
According to Gregory Sobel, assistant VP at Moody’s, implementing strong cybersecurity measures can lower the risk of exposure. However, such initiatives can be expensive and may divert resources from essential services, which poses a challenge for credit.
This report arrives at a critical juncture as various state and local administrations have faced severe ransomware attacks and data breaches that have affected millions of citizens.
At the beginning of May, the City of Dallas experienced an attack that was connected to the Royal ransomware group. The attack resulted in the local courts and the website for the Dallas Police Department being knocked out. Additionally, the hackers made a threat to release personal data on local employees.
Recently, the Louisiana Office of Motor Vehicles and the Oregon Department of Transportation experienced significant data breaches due to the MOVEit vulnerability. This breach led to the theft of millions of drivers’ personal information.
To secure your organization, there are steps you can take. Local governments can receive federal funding through the State and Local Cybersecurity Grant Program, which offers approximately $1 billion over four years to enhance their networks. Grants for the first year will be issued soon, while the application process for the second year will be open in late summer or early fall.
At Commonwealth Sentinel, we have collaborated with various clients and organizations to submit grant applications. If you require assistance, we are available to support you. Contact us today to learn more!