Almost every small business in the United States has some sort of cyber liability risk. If your business collects, stores, or transmits sensitive data like customer names, DOBs, addresses, and payment information, you could be at risk of a cyber-attack. Cyber threats are increasing in frequency and severity every year. But what are the most common cyber-attacks that cause cyber claims, and how does a cyber policy help protect your business? 

Here are the 5 most common types of cyber insurance claims: 

1. Ransomware 

Imagine an employee clicks on a link they believe is taking them to their payroll portal. Instead, that link downloads malware that infects your businesses system and encrypts your data. The malware then makes this data inaccessible until a ransom is paid to the attacker.  

Cyber liability covers the expenses of hiring consultants and experts to respond to the attack and covers the cost of paying the ransom up to the limits of your cyber policy. 

2. Distributed Denial of Services (DDoS) Attack 

DDoS attacks happen when cyber criminals overload your businesses system causing it to crash by overwhelming it with traffic. This attack in turn causes your website, system, customer data, etc. to be inaccessible to you and your customers. This can lead to a loss of income due to operational loss and reputational loss due to upset customers. Luckily, cyber insurance helps you recover from both. 

3. Phishing 

Phishing attacks occur when a harmful link is clicked through a text message or email and takes you to an external site that downloads malware onto your computer or system. This malware then searches your databases for lucrative information such as passwords, bank account information, credit card numbers, and personally identifiable information (PII). These attacks are extremely successful. Cyber liability insurance covers incident response, data recovery, and legal expenses up to the cyber limits on your policy. 

4. Human Error 

Human errors can also lead to cyber insurance claims. Some common examples are employees leaving passwords taped to computers, using simple passwords, or accidentally sending sensitive information to an external source. In these instances, if personally identifiable information is accessed by an unauthorized user, a business owner is liable and required to notify all their affected customers. These costs are covered by a cyber insurance policy. 

5. Data Breach 

A data breach is when information is stolen from a system without the authorization of the system administrator. This can be due to malware or other cyber-attacks. Cyber liability insurance helps cover the costs for forensic investigators to determine the cause of data breaches and with incident response. But most importantly, cyber insurance can help cover legal expenses for lawsuits from affected customers. 

Cyber-attacks can happen at any time to any business. According to Bloomberg, 43% of small businesses do not feel financially prepared to handle the repercussions of a cyber incident. Cyber liability insurance can put a business owner’s mind at ease by covering 1st party cyber risk expenses like forensic investigation, data recovery, notification, and credit monitoring. Cyber insurance also covers 3rd party costs such as legal expenses due to lawsuits and regulatory fines.

Get your cyber liability insurance quote today!