Held hostage by hackers, cities choose among ransom, recovery, and insurance

As cyber criminals continue to extort municipalities for Bitcoin, cities are choosing whether to pay ransoms, risk rebuilds, or buy insurance.

June 27, 2018

Cyber-criminals are hacking into towns and cities across the country to extort Bitcoin ransoms. This year, 38% of the municipalities interviewed by an information security research company are expected to be targeted by ransomware, compared to only 13% in 2016. 

As the problem grows, some municipalities refuse to negotiate with hackers — while others spend big bucks on expensive cyber-insurance policies.

Ransomware now comes with customer support

Equal opportunity thieves target cities and towns alike by offering “customer service” assistance to help local authorities buy — and then fork over — cryptocurrency, reports The Wall Street Journal.

One cyber attack that shut down Atlanta’s city government demanded $51k in Bitcoin — and will end up costing the city more than $11.5m to restore its systems after they failed to cooperate. But, thieves also target small towns like Rockport, Maine, which has fewer than 4k residents.

No matter what the solution looks like, it’s expensive

As crime increases, so do efforts to fight it — and struggling towns must choose among expensive ransoms, expensive recoveries, and expensive cyberinsurance policies (a growing multibillion dollar global industry, with 86% of the coverage sold to US companies).

In Spring Hill, Tennessee, authorities spent $100k recovering from their hack (while a huge amount of money for the city, it’s still less than the $250k ransom).

Other cities simply buy insurance to eliminate the risk, like Franklin County, Ohio, which paid for a $10m policy last year at a $200k annual premium.

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