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Home » Cyber Liability Insurance – What Constitutes a Cyberattack? 
April 24, 2024

Cyber Liability Insurance – What Constitutes a Cyberattack? 

red padlock on black computer keyboard symbolizing cyber liability insurance

In our increasingly interconnected digital world, cyberattacks have become a pervasive threat. These malicious acts target computer systems, networks, and sensitive data, causing significant harm to individuals, businesses and governments. Fortunately, by understanding cyberattacks and available loss control measures, potential targets may be able to limit their losses.

Common Types of Cyberattacks

A cyberattack generally refers to any deliberate effort to gain unauthorized access to computer systems, manipulate, steal or destroy data. These attacks can originate from individual hackers, organized criminal groups or state-sponsored entities. Consider the following types of cyberattacks:

  • Malware—Short for malicious software, these cyber incidents entail a perpetrator using trojans, spyware and viruses to compromise data and disrupt networks and systems.
  • Phishing—These scams are often conducted via email and text messages and aim to trick recipients into clicking on malicious links or revealing sensitive information, potentially leading to data breaches and financial losses.
  • Ransomware—A rising threat and specific type of malware, these cyberattacks generally consist of a cybercriminal extorting a target by holding their data or systems hostage until their demands are met.
  • Social engineering—Social engineering perpetrators often attempt to manipulate their targets into providing payments or revealing private information, leading to compromised data and financial losses.
  • Distributed denial-of-service (DDoS) attacks—In a DDoS attack, cybercriminals may attempt to disrupt a server or network by flooding it with unexpected traffic and overwhelming its capabilities. This often causes services and websites to become unavailable for extended periods, leading to significant financial losses.

How Can Cyber Liability Insurance Cover Cyberattacks?

Cyber liability insurance can provide crucial protection against the financial fallout of cyber incidents. Specifically, policies may help pay for the following:

  • Investigative services—Cyber liability insurance may cover the costs of investigating a breach. Experts analyze the attack’s origin, scope, and impact.
  • Data recovery—If your data is compromised, this insurance may cover the expenses of recovering it. Whether it’s restoring backups or hiring specialists, data recovery is essential.
  • Legal fees—If affected customers or business partners sue you due to a breach, the insurance may cover legal expenses and potential settlements.
  • Lost income—When cyberattacks disrupt your operations, resulting in lost revenue, cyber liability insurance may compensate for the financial impact.
  • Reputational rehabilitation—After a data breach, rebuilding your company’s reputation is crucial, potentially necessitating the services of a public relations firm.
  • Ransom payments—If faced with ransomware, the insurance can cover the ransom payment necessary to regain access to your data.

We’re Here to Help

Cyberattacks are a real and constant threat. Regardless of size, businesses should consider cyber liability insurance as a vital safeguard against the financial consequences of these attacks. Understanding the risks and investing in protection, you can navigate the digital landscape more securely.

At Liberty Choice Insurance, providing appropriate coverage at ideal rates is an integral part of our mission. Visit our website or call 702-742-6322 to learn more.


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. 

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