Cyber Liability Insurance – What Constitutes a Cyberattack?

Businesses must always recognize and address relevant risks and exposures, but such concerns can change over time. In recent years, cyberattacks and data breaches have become a prominent threat for companies of all sizes and across most industries, potentially incurring significant financial and reputational harm. By understanding common cyberattacks and how cyber liability insurance may assist with financial security, your business can position itself to limit potential consequences arising from these incidents.

Common Types of Cyberattacks

Cyberattacks can generally be defined as any intentional act committed with the intent to steal, expose, alter, disable or destroy digital information, applications or assets. These attacks are typically conducted by perpetrators gaining unauthorized access to a company’s networks, systems or electronic devices. Many businesses may encounter the following types of cyberattacks:

• Phishing—These attacks are typically hidden within fraudulent email or text messages and may attempt to convince an employee to download a dangerous file or provide sensitive information.

• Malware—Malicious software can infect your business’s networks and systems, potentially corrupting or stealing critical data. Ransomware has emerged as a particularly common type of malware used in cyberattacks and may allow perpetrators to hold sensitive information hostage and blackmail targets.

• Social engineering—These cyberattacks attempt to manipulate employees and targets to provide access to important information. These methods may not always be conducted purely over the internet, as perpetrators may physically gain access to business premises and devices by posing as if they’re qualified to be there.

• Denial-of-service attacks—Also known as distributed denial-of-service attacks (DDoS), these cyber incidents can flood a business’s network with fraudulent traffic, overwhelm its ability to function, or even force a shutdown.

How Can Insurance Help?

Cyber liability insurance can play a critical role in offsetting the financial consequences of cyberattacks, potentially by assisting with the following losses and expenses:

• Incident response costs

• Business interruption losses

• Data and system restoration expenses

• Noncompliance fines

• Legal fees

We’re Here to Help

Contact Foulcard Insurance Agency in Franklin, Louisiana, today to learn more about cyberattacks and cyber liability insurance.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.