ransomware
Definition
Ransomware is malicious software that criminals use to lock you out of your own computer systems or encrypt your business data until you pay them a ransom fee. Courts and regulators treat a ransomware attack as a data breach, which means your business may have legal obligations to notify customers, employees, and government agencies even if no data was actually stolen. Many data privacy laws hold business owners responsible for protecting against these attacks, so suffering one can expose you to lawsuits and regulatory fines on top of the ransom demand itself.
Example
A hacker breaks into your small accounting firm's network, encrypts all your client tax files, and demands $50,000 in cryptocurrency to restore access, leaving you unable to serve clients for days or weeks. Even if you pay and get your files back, you may still be legally required to notify every client whose information was on those servers.
Watch Out
Paying the ransom does not erase your legal obligations to report the breach, and in some cases paying certain criminal groups can actually violate federal sanctions laws.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.