If a company conducts business online, uses cloud storage, or uses the Internet to transmit any information typically there’s cyber security tools (like firewalls) in place, but what happens when these measures fail? Businesses are at greater risk for cyber-attacks as threats ramp up and perpetrators find new and more sophisticated ways to access company networks. Cyber insurance, also known as cyber risk insurance, can help protect your company from the potential consequences of a cybersecurity breach.
What are the most common types of cyberattacks?
Cybercriminals can use a variety of techniques to gain access to a company’s computer systems. Here are some of the most common methods being used today:
Phishing attacks
Sending emails to employees to trick them into revealing their passwords or get them to download software that lets cybercriminals gain access to the company’s network.
Malware
This can include a variety of methods including viruses, ransomware, and spyware. Malware can infect a computer system in several ways. Even clicking on a malicious link can cause malware to be downloaded. Once installed, malware can lead to data theft, significant disruptions in company operations, and financial losses.
Taking advantage of software vulnerabilities
When software vendors discover vulnerabilities in their products, they typically send out a software update to patch them. These vulnerabilities can be exploited if the user does not install these updates in a timely manner. New software can also have vulnerabilities the software vendor isn’t aware of yet.
Password attacks
These involve techniques that rely on luck, educated guesses and time to figure out usernames and passwords of unsuspecting persons.
Unsecured wireless networks
Sensitive information can easily be stolen when you or an employee use a poorly secured Wi-Fi network, such as a free network in a coffee shop or at the airport.
Insider threats
Employees or contractors can access the network to steal sensitive data, compromise data, or download malware.
Internet of Things (IoT) vulnerabilities
Devices connected to the Internet offer yet another way to access networks, especially if these devices are poorly secured.
Bricking
Devices can sometimes be rendered useless by a cyberattack, otherwise known as bricking. This can be done to hold the device for ransom or in an attempt to eliminate evidence of a cyber-crime.
It is important to remember that technology changes rapidly, and new cyber threats are constantly emerging. The best defence against them is to be proactive: keep software up to date, make sure employees are properly trained, and use IT best practices for detecting and preventing cyberattacks.
How common are cyberattacks?
It is difficult to put an exact figure on the prevalence of these crimes or their impacts on businesses, but it was reported in 2022, that over 500 million dollars had been stolen as a result of cyber fraud in Canada. Many of businesses fail to report these incidents, making it difficult to arrive at exact figures. However, we know that there is much more online activity now, following the shift to working from home, and the increased reliance on online transactions. A report by the Canadian Centre for Cyber Security predicts that ransomware will continue to be a problem for Canadian businesses, and the ransom amounts will likely continue to rise.
How can cyber insurance help?
Even the most advanced cyber security systems can have weaknesses that a skilled cybercriminal might be able to exploit. Recovering from a cyberattack can be expensive, both financially and reputationally, which is where insurance can help. Consider the potential costs associated with a potential cyberattack:
- Ransomware generally involves a direct cash or cryptocurrency transaction, and businesses often feel they can minimize their losses by paying it. Although there’s no guarantee that they will recover their data or regain access to their computer systems.
- Investigating the incident can be a key component of getting your business back on track. But, you may have to hire additional cybersecurity specialists or use an external consultant to uncover the full scope of what happened and how.
- Loss of income could result if your business is not able to operate following the cyber incident.
- Restoring data that was lost or compromised can be expensive and time-consuming.
- Notifying stakeholders such as customers and others affected by a data breach can be costly. Depending on the size of your business, this could involve hiring more staff, setting up a call center, and working with a crisis management or public relations company.
- Regulatory fines and penalties may be assessed against your company depending on the industry you are in.
Cyber insurance can help mitigate these potential costs and help your business get back up and running. The peace of mind gained from having the right cyber insurance in place prior to a cyberattack can be invaluable. Remember, it’s important to always speak with an insurance specialist to make sure a policy is right for your business and is providing the coverages you’re looking for.
Ensure you’re protected with cyber insurance
Cyber insurance can help cover financial losses your business suffers as well as potential claims made by third parties, such as your customers if they are affected by a cyber incident. Federated also offers risk management resources which can help your business prepare and deal with an unforeseen event. Learn more about cyber insurance on our blog.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.