To many business leaders, ‘malware’ and ‘ransomware’ sound like the same problem. In reality, their difference is like the difference between a leaky faucet and a burst dam. While one is a persistent problem, the other is a full-stop catastrophe. In this article, we’ll break down the critical differences in their business risk, financial impact, and legal liability. Plus, what you need to know to protect your organization.
What is Malware
The primary goal of most malware is to operate in the background, often undetected. Its purpose can range from simple disruption to sophisticated espionage.
Malware, short for malicious software, is a broad term encompassing harmful software designed to compromise computer systems, networks, and devices.Â
Cybercriminals create malware to cause damage, steal sensitive information, disrupt operations, or gain unauthorized access to systems.
Common types of malware
As an umbrella term, malware includes many types of attack techniques. Ransomware is the most destructive malware type and always has monetary gain as its goal.Â
Other types of malware can focus on different goals, such as business disruption or espionage.
Viruses
A virus is a malicious code or program that infects other files and causes damage to the system. They can corrupt data, disrupt system functionality, and replicate themselves.Â
The virus activates and spreads to other files or systems when the infected program or file is executed.
Trojan Horses
A Trojan is software that disguises itself as a legitimate application or file to deceive users into downloading and executing it. Unlike viruses, they don’t self-replicate.Â
They can steal sensitive information, create backdoors for attackers, or perform other harmful actions.
Spyware
Spyware is software that secretly collects information about a user’s activities and sends it to a third party. It secretly monitors a user’s activities without their knowledge or consent. This can include monitoring keystrokes, capturing screenshots, or using the computer’s camera.
Adware
Adware is malicious software that displays unwanted advertisements on a user’s device. It can be intrusive and may collect personal information for malicious purposes.
Adware often comes bundled with free software or browser extensions. It generates revenue for developers by showing ads, but aggressive adware can negatively impact system performance.
What is Ransomware
Ransomware is a specific type of malware that restricts access to data until a ransom is paid. Cybercriminals use multiple tactics to infect computers, devices, and networks with their encryption algorithms, often starting through phishing emails that contain malicious links or attachments.Â
Once installed, ransomware uses encryption to lock the victim’s files or entire systems. This transforms the data into an unreadable format, and only the cybercriminal possesses the decryption key needed to revert the files to their original state.
Ransomware threats range from restraining the decryption key to leaking the stolen data, and a successful attack can have severe consequences. Victims may experience the inaccessibility of critical data, disruption of business or organizational operations, financial losses associated with downtime, and potential reputational harm.
Common types of ransomware
Despite being a unique type of cyberattack, ransomware has various techniques and methods, including a business model.Â
Here are the common types of ransomware:
Crypto ransomware
Crypto ransomware is the traditional attack method: it encrypts files on a victim’s system, making them inaccessible without a decryption key.
Threat actors display a ransom note, demanding payment in cryptocurrency (e.g., Bitcoin) for the decryption key.
Crypto ransomware results in severe data loss, financial losses, and operational disruptions.
Lockers
Lockers take control of the victim’s entire system, locking them out completely. Victims cannot access any files, applications, or system functions. It displays a full-screen message (lock screen) demanding payment.
The impact of locker ransomware is a complete system lockdown, disrupting work and productivity.
Leakware
Leakware, or doxware, threatens to leak sensitive data unless a ransom is paid. Instead of encrypting files, it exfiltrates sensitive data (personal, financial, or corporate). The attacker threatens to publish the data publicly unless the victim pays.
These attacks damage reputation, legal consequences, and potential financial losses.
Most recent ransomware attacks apply double extortion techniques where the criminals encrypt the data and threaten to leak stolen information.
Ransomware as a Service (RaaS)
RaaS is a criminal business model where developers create and distribute ransomware. Aspiring attackers can rent or purchase ransomware kits from RaaS providers. These kits include the ransomware code, infrastructure, and payment mechanisms, i.e., there is no need to understand algorithms to perform a ransomware attack.
The RaaS model allows ransomware attacks to be more common, leading to growing cyberattack groups with multiple goals, despite the monetary gain.
Malware vs. Ransomware: Business Impact Comparison
Operational impact of malware and ransomware
Any cyberattack is disruptive, but the impact scale varies according to the attack type. This is the most fundamental difference between malware and ransomware. One is an operational drag; the other is a full-stop catastrophe.
Operational impact of malware
With general malware, you’re fighting an insidious degradation. A Trojan might be slowing your network, or spyware could be quietly siphoning credentials from a single department. It’s a serious problem that your IT team must hunt down and eradicate, often while the rest of the business continues to operate, albeit inefficiently. The goal is to find and remove a “pest” before it causes a major breach.
Operational impact of ransomware
With ransomware, you’re facing immediate, total operational paralysis. This is not a leak; the dam has broken. The attack is designed for maximum disruption by first targeting your most critical assets: domain controllers, VMWare servers, and core databases. This means:
- Your employees cannot log in to their computers.
- Your customer-facing portals and e-commerce platforms are offline.
- Your supply chain grinds to a halt because your ERP and logistics software are inaccessible.
- Your VOIP phones may even stop working.
Financial risk of malware and ransomware
Financial outcomes from a cyberattack can be disastrous and even cost the business. The monetary damage from malware is typically linear and manageable. The cost of ransomware is exponential and attacks the core financial health of your business.
To mitigate the impact of these costs, particularly the downtime and service fees associated with a chaotic response, many organizations adopt an Incident Response Retainer (IRR). An IRR is a pre-arranged agreement that provides 24/7/365 access to a team of cybersecurity experts. This proactive approach ensures that a qualified team is on standby to manage a crisis immediately, drastically reducing the response time.
Financial risk of malware
Malware’s costs are generally contained within your IT budget. They are the predictable (though painful) operational expenses of cleanup. You’ll pay for IT overtime or an external consultant’s billable hours.Â
A digital forensics investigation to determine the scope of a data leak is a specific, quantifiable cost. It’s an unplanned expense, but you can typically manage it.
Financial risk of ransomware
Ransomware’s costs are a multi-front financial disaster that threatens your projections. The real cost of ransomware includes downtime, removal, and recovery services costs, and it endures for months or even years, depending on the time of response, data encryption, and business size. Also, several data protection laws and regulations include fees and penalties once the business fails to comply with their industry security standards.
Downtime
Downtime is when your business is non-operational because critical files, applications, or entire systems are encrypted and inaccessible. Every minute of downtime translates directly into lost revenue, decreased productivity, missed deadlines, and potential contractual penalties.
Removal and recovery services costs
Specialized external help is often required when an attack happens, incurring significant service costs. Ransomware recovery services usually include:
- Incident Response and Containment: Identifying the scope of the breach and isolating affected systems to stop the ransomware from spreading.
- Data Recovery: This can involve multiple technical approaches, from using public or proprietary decryptors and exploiting encryption weaknesses to “data carving,” which attempts to reconstruct damaged files from raw disk data.
- Forensic Analysis: Investigating the attack to understand the entry point and determine what data was stolen (exfiltrated) before being encrypted.
Response time
The time it takes for your organization to detect, respond to, and remediate the attack is a critical cost variable. A slow response allows the malware to encrypt more data, spread to more systems (including backups), and gives attackers more time to exfiltrate sensitive information. A faster, more organized response minimizes the operational halt, reduces the complexity of the recovery, and can significantly decrease the total financial impact of the incident.
Data protection laws and regulations
Data protection laws like GDPR, HIPAA, CCPA, and others mandate that organizations properly secure personal or sensitive data. A ransomware attack is often considered a data breach, especially if data theft is proven. This failure to comply with security standards triggers mandatory breach notifications to affected individuals and regulatory bodies, which in turn leads to investigations, audits, and potentially severe fees and penalties that can reach millions of dollars or a percentage of annual global revenue.
Legal liability of malware and ransomware
For your General Counsel, a malware incident is a difficult day; a ransomware attack is a career-defining legal crisis. The liability of a ransomware attack is a multi-front disaster that threatens your company’s regulatory compliance and legal standing.
Legal liability of malware
With a malware breach (e.g., spyware that stole a customer list), your legal path is difficult but clear. You have a data breach. Your counsel’s job is to manage the incident, preserve evidence, and follow the statutory reporting requirements for GDPR, HIPAA, CCPA, or other regulations. The primary goals are notification, remediation, and managing the fallouts with regulators.
Legal liability of ransomware
With a ransomware attack, your legal team is fighting a war on three fronts at once:
- The Breach. You have all the same data breach reporting duties, but they are massively amplified by the double extortion threat. The attackers will publicly name your company and threaten to release the data, effectively starting the clock on your regulatory and public relations response.
- The Extortion. You are now the victim of a major federal crime. The FBI and CISA will be involved, and you are strongly advised not to pay the ransom, as it emboldens the attackers and funds their future operations.
- The Sanctions (OFAC). Here is the legal trap. Your leadership team pressures you to pay to get the business back online. However, the U.S. Treasury (OFAC) has designated many ransomware gangs as sanctioned entities. If you authorize payment to one of these groups, your company itself could be found guilty of violating federal law and face crippling fines, separate from any data breach penalties.
This creates an almost impossible conflict: your business needs to recover, but the act of recovery (paying) could be a crime. The burden falls on your legal team to perform emergency due diligence on the attacker’s identity.
What to do in case of a malware or ransomware attack
In the event of a malware or ransomware attack, notify your organization’s IT support or security team immediately. Provide details about the incident, including any observed symptoms, to enable them to assess the situation and take necessary actions. The information you provide is essential to understand the infection and to identify the ransomware strain in your network.
If your organization has an incident response plan, follow the predefined procedures outlined in the plan. This may include specific steps for identifying, containing, eradicating, recovering, and investigating the incident.
The best course of action a business can take after a ransomware attack is to contact a cybersecurity and ransomware removal service. These services will provide you with every step of incident response and mitigation. From identifying and containing, to removing the malware from your computer or network, and contacting authorities. Also, experts can recover lost, encrypted, or corrupted data, being the best option for victims to remediate attacks and salvage their businesses’ future.
