Ransomware attacks remain a persistent threat for small to medium-sized businesses (SMBs) that often lack the extensive security defenses of larger enterprises.
In a ransomware attack, a threat actor encrypts an organization’s data, bringing operations to a standstill. SMBs in this position face a difficult decision: They can either pay the ransom with no guarantee of data recovery or invest in costly and time-consuming recovery efforts.
Beyond the immediate impact of an attack, ransomware can lead to a decline in revenue, damaged customer trust, and legal consequences if sensitive data is compromised. Without proper cybersecurity measures in place, many SMBs struggle to recover from ransomware, sometimes leading to permanent closure. In this case study, we examine the real-world challenges faced by one SMB navigating the aftermath of a ransomware attack.
Redpoint Case Overview
This use case explores how Redpoint Cybersecurity supported a small manufacturing business through a ransomware attack — highlighting the critical need for cyber insurance and expert incident response.
The Scenario
In June 2024, a small manufacturing company with fewer than 50 employees and an annual revenue of $5 million fell victim to a ransomware attack. The breach was discovered when an employee reported being unable to connect to the company’s server.
Further investigation revealed that a known threat actor had infiltrated the organization’s system and encrypted critical data. While the organization had cyber insurance coverage, it still faced some additional expenses it was responsible for paying.
The Stakes
With their data still encrypted by the threat actor, the company faced major hurdles in maintaining full production capacity, which resulted in daily revenue losses and prolonged downtime.
Redpoint’s Reaction
Once engaged, Redpoint’s cyber threat response team quickly requested the necessary devices and data to assess the scope of the cyberattack. The team discovered that the threat actor had not only encrypted the company’s primary systems but also compromised the backups, holding them for ransom.
Throughout the crisis, Redpoint’s experts worked closely with the manufacturing company, providing valuable guidance on managing the situation and exploring potential recovery options. Redpoint’s intervention played a key role in helping the company navigate the crisis, ensuring careful attention to which expenses were covered by the insurance policy versus which ones the organization was responsible for paying.
The Outcome
Although the threat actor accepted a lower ransom, the manufacturer’s policy wasn’t able to cover all the expenses needed to recover the encrypted files. As a result, the organization had to handle the remediation and rebuild their IT environment independently. This led to much higher out-of-pocket expenses and prolonged disruptions in customer deliveries.
Lessons Learned
Ransomware attacks can devastate an SMB that may not have the same robust resources as their enterprise counterparts. In this case, the manufacturer faced significant financial and operational challenges in the face of ransomware due to some of the unforeseen costs
The situation underscores a crucial lesson: You have to understand and address your specific needs and risks when selecting cyber insurance policies. Cyber insurance companies and brokers work together to help find coverage that’s tailored to your organization’s unique needs and risk tolerance. Proper coverage can safeguard your business’s financial health and reputation, preventing costly disruptions and losses.
Redpoint: Your Partner for a Secure Future
While some of the costs of this event were unexpected, the Redpoint team was still able to work within the victim’s budget to help them contain the threat quickly, navigate the aftermath, and offer guidance to begin the recovery process.
At Redpoint Cybersecurity, we are committed to serving individuals and organizations that are victims of cyberattacks. By helping you understand your cybersecurity risks and needs, you can make informed decisions that protect the future of your business.
Reach out to us to learn more about the suite of services and solutions from Redpoint Cybersecurity.