The consequences of a successful cyber attack can be stark. Organizations often face significant financial damage due to lost revenue due to downtime, plus compliance, legal, and regulatory costs, and legal fees arising from potential lawsuits, not to mention reputational damage. These costs can quickly blow the average out of the water, with many organizations facing seven-figure costs to restore their operations and fully remediate a breach.
The numbers tell the story:
- Arctic Wolf’s State of Cybersecurity: 2025 Trends Report found that 70% of security leaders reported experiencing at least one “significant cyber attack” in 2024.
- The Arctic Wolf 2025 Threat Report reveals that 96% of ransomware cases investigated by Arctic Wolf over the past 12 months involved data theft prior to extortion, marking a shift toward double-, triple-, and even quadruple-extortion tactics where the exfiltration of data is used to amplify pressure on victims and improve the odds of receiving payment.
- Today, an average of 12% of organizations make a claim on their cyber insurance policy in a given year, with social engineering and ransomware being the most common culprits. And NetDiligence has found that small-to-medium enterprises make up the majority of cyber insurance claims, with an average amount of $205,000 (USD).
As cyber threats escalate in both frequency and sophistication, organizations can no longer afford to treat incident response (IR) as a reactive necessity — it is a strategic investment in resilience.
What Is Incident Response?
In cybersecurity, incident response is the processes and tools used to identify, contain, and remediate a cyber incident within an organization’s environment.
IR is commonly needed in instances of significant data breach, such as business email compromise (BEC) attacks, ransomware encryption events, active threat actors in the environment, compromised domain controllers, and active malware where the root cause can’t be found.
The goal of incident response is to limit the damage from a cyber incident, understand what happened and permanently resolve the situation, get business operations back to normal as quickly as possible, and prevent the same issue from occurring again.
At its core, incident response is about protecting the organization’s business, reputation, and bottom line.
IR includes three main components:
- Securing an IT environment by eliminating the threat actor’s presence and access
- Analyzing the cause and extent of the threat actor’s activities while inside the IT environment
- Restoring the IT environment to pre-incident condition
What Are the Main Incident Response Stages?
Today, many organizations partner with a third-party IR solution provider to ensure they have a robust response should an incident occur. However, whether conducted by an in-house team or a third-party, effective incident response has several core stages, many of which can and should be conducted simultaneously to reduce both the mean time to detect (MTTD) and mean time to respond (MTTR):
Rapid Detection and Verification
Incident response can help IT and security teams quickly identify potential security events and validate whether they constitute true incidents. This can reduce MTTD and limit threat actors’ dwell time.
Containment
IR helps ensure defenders can isolate affected systems, networks, or accounts to stop the spread of the attack, while ensuring major business functions remain operational when possible.
Eradication
This essential part of any IR effort focuses on the removal of malicious artifacts or persistence mechanisms like malware or backdoors, as well as the resetting of any compromised credentials. It also should address the root cause, once identified. This can mean everything from patching a known vulnerability to decommissioning an exploited application.
Recovery and Restoration
After detecting, containing, and eradicating the threat, IR should focus on safely returning impacted systems to full function. This can include restoring from off-site backups, restoring endpoints and servers and reconnecting them to the network, and using data recovery services to recover deleted or corrupted data. Validating system integrity and conducting post-remediation testing is also a vital part of this stage of IR.
Preservation of Evidence
This stage should not follow the previous one, but be conducted throughout the IR process, as the collection and secure storage of logs, memory captures, and forensic artifacts are essential for post-incident investigations conducted for legal, compliance, or insurance purposes. A proper IR plan can help ensure that organizational stakeholders maintain proper chain of custody to support any potential future needs.
Communication and Coordination
Both during and after an incident, it’s essential to communicate timely, accurate information to internal stakeholders like C-suite executives as well as legal and HR team members, in addition to external parties like regulators, customers, partners, law enforcement, and cyber insurers.
Continuous Learning and Improvement
Once the incident is in the rearview, IR teams should conduct post-incident reviews of the IR effort to uncover what worked and what can be improved upon. Then, using those insights, the organization should update its IR plan, playbooks, policies, and security controls to prevent recurrence.
Key Components of Incident Response
A full-service incident response is one that provides end-to-end coverage and support across the stages described above. But it should also have capabilities that go beyond these stages, or specific expertise to make these stages more effective and efficient.
Forensics
As stated above, incident response must follow a disciplined path centered on three core objectives: secure the environment, analyze the breach, and restore operations safely. And one key component plays a large role in each of the three stages. And it’s a component you should ensure your IR team can deploy: digital forensics.
Further, forensic disciplines span multiple domains, including computer, network, mobile, and databases, bringing comprehensive visibility into attacker behavior. The forensic process itself includes seizing media, creating reliable duplicates, verifying via cryptographic hashing, and then conducting thorough analysis to uncover concealed or deleted artifacts.
Digital forensics enables:
- Evidence preservation during containment
- Incident reconstruction during analysis
- Validation of clean systems during recovery
Robust digital forensic capabilities accelerate response and reduce downtime — especially critical in ransomware incidents, during which organizations may take more than 100 days to fully recover if forensic work is inadequate.
Ransom Negotiation
The other key component to consider when dealing with a ransomware attack is ransom negotiation. The FBI advises victim organizations to refuse to pay ransom s, as it doesn’t guarantee the decryption or recovery of data or systems, and serves as encouragement to threat actors that these attacks result in paydays. However, recent research shows that 76% of victim organizations did, indeed, pay either the full or a reduced ransom amount.
Negotiation sometimes occurs when systems are locked and backups or alternatives are unavailable. In such scenarios, professional negotiators may help reduce ransom amounts, verify decryption capability, and manage communication to avoid further escalation.
However, not all negotiators are equally equipped. The 2025 Arctic Wolf Trends Report found that 90% of ransomware victim organizations in our survey who paid a ransom were working with a professional negotiator. As the payment rate for organizations contracted with Arctic Wolf Incident Response was just 30% in 2024, it’s clear that capabilities vary, and organizations should be diligent in researching and working with the most experienced and skilled ones.
See in detail how Arctic Wolf Incident Response provided rapid remediation to a ransomware encryption event.
The Value of Working with an IR Provider
Working with an external incident response (IR) vendor provides organizations with expertise, speed, and objectivity when facing a security incident. One of the most significant advantages is gaining access to specialized skills that are difficult and costly to maintain in-house. IR vendors have expertise dealing with a wide variety of incident types, ranging from business email compromise to advanced ransomware attacks.
This depth of experience means they can quickly identify attack vectors, determine the scope of compromise, and recommend or help execute effective containment and remediation measures, which can save significant time when every second counts. For example, Arctic Wolf Incident Response customers saw median restoration times about 15% faster in response to ransomware with an average restoration time of 22 days as compared to the industry average of 26 days as reported by Statista as of Q1 2022. Results may vary.
Another reason to partner with a third-party provider is objectivity. Internal security teams may be overwhelmed during an incident, struggling to distinguish between false positives and active threats. A third-party team brings a fresh perspective and avoids internal biases, which can accelerate investigation and prevent mistakes that could worsen the impact. They also serve as a neutral partner when dealing with external stakeholders such as regulators, insurers, or law enforcement, ensuring that incident reporting and evidence collection meet compliance requirements.
When To Engage a Provider
The right time to contract with an IR service is ideally before an incident occurs. Too often, organizations wait until they are in the middle of a breach to seek outside help, which leads to delays in onboarding, contract negotiations, and logistical setup. Establishing a relationship in advance ensures the IR provider understands the organization’s environment, critical systems, and escalation procedures. This preparation enables faster response and reduces dwell time once an attack occurs. Even if an incident has not yet happened, a provider can perform readiness assessments, tabletop exercises, and compromise assessments to identify potential weaknesses and improve overall resilience.
IR Retainers
For organizations not ready to fully commit to a long-term partnership, IR retainers offer a flexible solution. A retainer is essentially a pre-arranged contract that provides priority access to a response team when needed. Retainers vary in scope; some are purely “hours-based,” where clients purchase a block of IR hours that can be used during an incident or for proactive services, while others include service-level agreements (SLAs) with specific service guarantees, such as a three-hour response window. Retainers offer faster access to experts when time is critical and predictable budgeting for what can otherwise be an unpredictable expense.
Learn more about the Arctic Wolf Incident360 Retainer, which provides full-service coverage for one incident and advanced readiness offerings to prepare organizations for cyber incidents.
Ultimately, third-party IR services complement internal security teams by providing advanced expertise, rapid mobilization, and contractual assurance during high-stakes situations. Proactive engagement through retainers or pre-incident contracts ensures organizations are not negotiating terms under duress but instead are prepared to respond efficiently, contain threats quickly, and minimize financial and reputational damage.
Arctic Wolf® Incident Response is a trusted leader in IR, valued for breadth of IR capabilities, technical depth of incident investigators, and exceptional service provided throughout IR engagements. Arctic Wolf IR offers a faster response, complete remediation, and quicker restoration by making sure every element of the response is working in parallel, with each informing the other.
See incident response in action in our on-demand webinar featuring true tales from the threat intel trenches.
Understand how a Security Operations approach can enhance your incident readiness while reducing risk with the 2025 Arctic Wolf Security Operations Report.
