Last week, we explored ransomware's extensive "second-order harms" on downstream businesses and everyday people. This time, we’re returning to the "first-order harms"—the direct impacts on the businesses that fall victim to these attacks.

The Immediate Impact of Ransomware on Businesses

In our previous discussion, we focused on the ripple effects of ransomware on associates and customers of the infected business, overlooking the immediate damage to the business itself. While the broader impacts are significant, the immediate consequences for the targeted business are severe and cannot be ignored.

• Recent data reveals that 45 percent of businesses were hit by ransomware last year.
• Ransom demands have surged, with the average demand reaching $1.5 million.
• Ransomware attacks are becoming more sophisticated, often involving triple extortion—encrypting data, leaking data, and notifying customers to increase pressure on victims.
• As major ransomware groups disband, smaller attackers are adopting their tools, increasing the threat to businesses.

Understanding First-Order Harms

First-order harms, as defined by the UK think tank Royal United Services in their report "The Scourge of Ransomware," refer to the direct damage inflicted on the targeted organizations and their staff. Here’s a breakdown of the harms categorized by their proximity to the initial attack:

• First-Order Harms - Direct impact on the attacked business and its employees.
• Second-Order Harms - Effects on downstream organizations and individuals reliant on the attacked business.
• Third-Order Harms - Broader societal and governmental impacts from widespread ransomware incidents.

For a deeper understanding, we recommend reading the above material. Now let’s summarize the primary damages ransomware inflicts on directly affected businesses.

How Ransomware Inflicts First-Order Harms

First-order harms are likely well-known and understandably alarming to those familiar with ransomware. The report emphasizes that the damage goes beyond the immediate financial loss often highlighted in media reports:

“While general reporting on ransomware harms often focuses on the immediate financial harm, for example, when media reporting stresses the size of a ransomware payment, the research data indicates that the range of harm experienced by the victim organisation is much broader.”

For those acquainted with ransomware, here’s a review of the potential impacts on your business, as well as some lesser-known personal impacts on your team members.

Ransomware's Common Impacts on Businesses

• Data, from operational to backup, can be encrypted, corrupted, stolen, leaked, and/or destroyed.
• Financial burdens increase due to ransom payments, recovery costs, and reputational damage, which can diminish customer trust and revenue.
• Employees are diverted from their regular duties to address the crisis, further straining resources and reducing productivity.

Personal Impacts on Employees

• The stress and anxiety over job security can lead to shame, resignation, and worse, especially if an employee feels responsible for the attack.
• Physical effects can include sleep deprivation, burnout, and even hospitalization.
• Financial instability may arise if the business cannot pay employees or if job losses occur. This can make it difficult for affected employees to find new employment and can strain personal relationships.

Imagine if a ransomware attack caused your business to fail. Could you forgive yourself or the person responsible for the breach? The consequences are severe and far-reaching.

Protect Your Business and Team from Ransomware

Ransomware is notoriously difficult to detect and recover from, but we’re committed to helping you prevent such attacks and their devastating impacts. We urge you to share this blog and "The Scourge of Ransomware" with your team to emphasize the importance of vigilance against cyberthreats.

We’re here to help. Contact us at 1-855-405-8889 to discuss how we can assist you in safeguarding your business from ransomware attacks.