Ransomware has become one of the most expensive forms of cybercrime in 2025. The average cost of a single incident is now $5.5 to $6 million, up from $5.13 million in 2024. Most of the damage comes from downtime, now averaging 21–24 days per attack, and the recovery effort it takes to bring systems back online.

The ripple effects are severe:

44% of companies lose $1 to $5 million for every hour of downtime

58% of victims are forced to shut down operations during the attack

Nearly half raise prices afterward to cover the losses

In this article, we break down how ransomware attacks typically start, why the real costs go far beyond the ransom itself, and the defenses like reliable backups and tested response plans that help businesses stay resilient when the countdown begins.

7 Reasons Ransomware Is More Expensive Than You Think

1. Downtime and lost revenue

Every minute of downtime has a price tag. Recent studies show downtime can drain $127–$427 per minute for SMBs, and larger organizations report losses of $300,000+ per hour. Even for smaller firms, a single day of outage can exceed $25,000 in lost revenue. These numbers stack quickly when critical functions, such as payroll, logistics, or customer support, are offline for days. What makes downtime more damaging than the ransom itself is that most of this revenue is unrecoverable.

2. Forensic investigation and recovery costs

Once attackers exploit weak entry points, companies face a long and expensive forensic process to uncover the scope of the damage. Security teams, often supported by outside specialists, must determine how the attackers got in, what data was accessed, and whether any other data security threats are still active.

Investigations can stretch for weeks, with hourly consulting fees, specialized monitoring tools, and round-the-clock staff time driving costs into six or seven figures. And that’s before you rebuild or replace corrupted infrastructure. Many organizations also discover gaps in their backup systems, forcing them to spend more to restore or even recreate critical data.

3. Regulatory fines and legal fallout

If personal or financial data is stolen, the incident immediately triggers compliance obligations and with them, the risk of steep penalties. In the U.S., HIPAA violations can cost up to $50,000 per violation, capped at $1.5 million per year for healthcare organizations that fail to protect patient data. In Europe, GDPR allows fines of up to €20 million or 4% of global annual revenue, whichever is higher. Other frameworks, such as PCI DSS for payment data, add another layer of scrutiny and potential penalties.

4. Customer trust and churn

The reputational damage from ransomware can be harder to fix than the technical breach. Surveys show the scale of this trust gap: 74% of consumers say they lose trust in a company after a data breach, and 70% admit they would take their business elsewhere. In some studies, the figure climbs to over 80% walking away entirely after a cyberattack.

Winning trust back often requires free services, credits, or heavy PR spending, but for a share of customers, no compensation is enough. Churn is permanent.

5. Cyber insurance and future risk exposure

Cyber insurance can help cover initial recovery costs, but a ransomware claim changes the risk profile of your business. Premiums often rise sharply, deductibles increase, and coverage for ransomware may be restricted on renewal.

Insurers also tighten their requirements, pushing companies to adopt new security controls before coverage is extended. That means additional investments in technology and compliance just to stay insured.

On top of that, once attackers know a business has paid or struggled with an incident, it’s more likely to be targeted again. The combination of higher insurance costs and elevated exposure makes ransomware a recurring expense rather than a one-off event.

6. Double extortion and data leaks

Increasingly, attackers copy sensitive data before locking systems, then threaten to publish or sell it if the ransom isn’t paid. This “double extortion” means companies face two crises at once: getting operations back online and preventing confidential information from becoming public.

The stakes are high. Leaked data can expose trade secrets, customer records, or employee information, creating long-term damage that can’t be undone. Even if systems are restored from backups, the breach still triggers regulatory scrutiny, reputational fallout, and potential lawsuits. Worse, paying the ransom is no guarantee. Some groups still release or resell stolen data after payment, leaving businesses to absorb both the financial and reputational costs.

7. Hidden soft costs

Employees often work nights and weekends during recovery, leading to burnout and turnover. Projects and product launches get pushed back, slowing growth. Customer support teams absorb spikes in complaints, refunds, and reassurance calls.

There’s also the opportunity cost: leadership time shifts from strategy to crisis management, while competitors press ahead unimpeded. Technical debt piles up when teams rush temporary fixes, creating new vulnerabilities that will cost more to resolve later. These “soft” costs don’t always get measured, but they drag on margins for months after systems are restored.

Beat the Countdown With a Tested Defense

Downtime, investigations, legal action, lost customers, higher insurance bills, public leaks, and hidden internal strain can add up to far more than any ransom demand. The only way to limit the damage is preparation. That means tested backups, a rapid incident response plan, clear communication protocols, and ongoing investment in security controls.