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January 31, 2025
Agency

Cyber Liability Insurance: What Constitutes a Cyberattack?

In recent years, much of our daily lives have moved into cyberspace. Online communications, cloud server storage and even daily work across various industries now frequently function in an online environment. However, while this new digital era offers many conveniences and opportunities, it also creates and exacerbates risks and exposures related to a cyberattack incident. That’s why you should prioritize understanding these growing threats and ensure you’re prepared for them.

What is a Cyberattack?

Generally, a cyberattack is any purposeful act committed by other parties to compromise, expose, steal or disable digital information and systems. Cybercriminals and hackers typically conduct cyberattacks by finding ways to gain unauthorized access to a network or electronic device.

What are Common Types of Attacks?

Cyberattacks may come in many forms, and perpetrators’ methods and tools have continued to evolve in recent years. Still, many common types of attacks remain prominent. Familiarize yourself with the following strategies for how you might avoid falling victim:

  • Phishing—These are harmful messages sent through email or instant messages that may attempt to extract passwords and other sensitive information by tricking you into following a fraudulent link or downloading a dangerous attachment.
  • Malware—Cybercriminals can use these attacks to infect your computers, tablets, smartphones and networks with malicious software that may grant them access to private data and sensitive information. This may include ransomware, which is an increasingly common attack method used to lock victims’ systems or data and potentially threaten to release sensitive information.
  • Distributed denial-of-service (DDoS) attacks—These cyberattacks typically involve one or more perpetrators flooding a system or network with fraudulent traffic. This causes the target to become overwhelmed, thus reducing its ability to maintain normal operations and often forcing a full shutdown.

How Can Insurance Help?

Cyber liability insurance is an increasingly integral component of many companies’ loss control measures. These policies can offer funds and resources to assist with various consequences of cyberattacks, including the following:

  • Breach response costs, such as notifying affected parties and hiring digital investigators
  • Business interruption losses, including revenue you would’ve earned if not for an attack
  • Noncompliance fines, such as those issued by regulatory agencies for substandard cybersecurity measures
  • Legal expenses, including attorney fees, settlements and judgments, should affected parties sue your business

We’re Here to Help

Contact Compass of California Insurance Services 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. 

Categories: Cyber Liability Insurance

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