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Defend your business with cyber liability insurance

In today’s connected business environment, cyber-attacks present a genuine risk to corporations across all industries and of any size — large, small, or somewhere in between.

Your business is even more susceptible if it stores or handles personal and private information online. But regardless of your business — even if you provide clients with consulting services from the comfort of your home office — making cyber liability insurance a priority is highly advisable.

What is cyber liability insurance?

Cyber liability insurance — or cyber insurance for short — steps in to help businesses in case of a data breach or other cyber incidents involving sensitive information like contact details, financial data, or personal health records. 

This kind of policy covers mistakes the business makes, whether they’re things the business should have done (omission) or things they shouldn’t have done (commission). A cyber liability insurance policy offers the business financial support to cover some of the costs that can pop up after an attack or cyber incident. 

And just to be transparent, general business liability insurance usually will not cover cyber liability. Businesses looking for protection related to cyber events will need to get a separate cyber liability insurance policy or locate a commercial umbrella insurance policy that incorporates some cyber protection.

Types of cyber-attacks to be aware of

Cyber threat tactics are constantly evolving and becoming increasingly sophisticated. That’s why it’s important for you to stay in the know, adopt suitable preventive measures, and move quickly if something does happen. 

Here are some of the most common cyber-attack methods:

  • Denial-of-Service Attack: This is an attempt to disrupt the normal functioning of a computer network and overwhelm the system with excessive traffic to the point where it cannot process legitimate requests. The goal is to make the targeted system or network unavailable to its users, causing a denial of service.
  • DNS Tunneling: This technique exploits the Domain Name System, bypassing security measures and generally remaining undetected by firewalls. By hiding non-DNS data within DNS packets, the attackers can establish covert communication channels and extract data. 
  • Malware: Short for “malicious software,” malware is any software designed to harm, exploit, or infiltrate computers, networks, or devices. It comes in various forms, including viruses, worms, trojans, ransomware, spyware, and adware, which install the damaging programs once inside a system. 
  • Man-in-the-Middle Attack: MitM attacks occur when a third party intercepts and potentially alters the communication between two parties without their knowledge. MitM attacks often include eavesdropping on Wi-Fi networks or inserting code to capture login credentials or other data.
  • Phishing: This is where deceptive emails, texts, or websites trick recipients into divulging sensitive information like usernames and passwords. Attackers often pose as trusted sources, like banks or popular online brands, fostering a false sense of legitimacy. This stolen information is then exploited for identity theft or unauthorized account access.
  • Ransomware: This form of malware not only restricts access to personal data but also demands a ransom for its release. Some variants stop at locking the system, but more advanced types encrypt user data, making it inaccessible until payment is made for the decryption key. These attacks can be severe, causing financial harm, operational disruptions, and long-lasting reputational damage.
  • Social Engineering: This category covers a wide variety of manipulative tactics that exploit human psychology to trick individuals into divulging confidential info or performing functions that compromise security. It often targets individuals, organizations, or even entire networks and involves deception, trust exploitation, impersonation, phishing, and employee baiting through emails, texts, and phone calls.
  • Structured Query Language (SQL) Injection: This is a cyber-attack where an attacker’s code is inserted into input fields of database queries. This can lead a system to execute unintended commands, potentially giving unauthorized access to sensitive data that is often stolen, altered or deleted.
  • Zero-day Exploits: This attack targets unknown vulnerabilities in software or hardware, providing attackers an advantage as there’s no known patch. Zero-day exploits get their name because victims have little time (zero days) to mitigate the threat. Because the attacker has the upper hand immediately, these are super popular among the cybercrime community. 

Keep in mind that cyber slip-ups often come from everyday actions. Someone might get tricked by a phishing scam, use a too-obvious password, or pop in a free USB drive that unknowingly carries malware. 

Even the most innocent employees can unintentionally kick off a cyber attack. That’s why educating and training your staff is invaluable. The more they know about different cyber threats and what could go wrong, the better they’ll be at spotting and stopping potential issues.

Who needs cyber liability insurance?

Insurance against cyber liabilities is not just reserved for tech giants; it’s a must-have for businesses of any size. Whether your operations are local or global, especially if they involve managing personal or financial data online, making cybersecurity a priority through this insurance is essential.

Consider all the sensitive information your business deals with — names, birthdates, contact details, IDs, passwords, health records, credit card details, banking info, driver’s licenses, and intellectual property. If your business handles any of these, it’s vulnerable to cyber threats, regardless of size or industry.

Working with third-party vendors adds more risk. If a data breach originates at or gets passed on through a vendor, your business could still be responsible. To reduce this risk, companies often require third-party vendors to carry sufficient cyber liability insurance, strengthening their cybersecurity stance. 

When do I need cyber liability insurance coverage? 

The answer is most likely “right now.” Being proactive beats playing catch-up with potential threats. But, before jumping into cyber liability insurance, it’s smart to know your weak spots. Doing a thorough assessment is a solid starting move, helping you figure out where you need the most protection. That’s where we can help. 

There are many different types of business insurance, including cyber insurance. Selecting the appropriate type is just as important as choosing and refining your products and services. 

But for businesses operating at least partly online, cyber liability insurance is not just a safeguard against cybercrime; it’s a wise investment in protecting client trust. To customize a cyber insurance program to your business needs and risk profile, connect with the Guided Solutions team today to discuss your specific situation.


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