Online Risks: Understanding Cyberattacks

October 15, 2024

In today’s digital landscape, the threat of cyberattacks looms large, posing significant risks to businesses of all sizes. As technology evolves, so do the methods used by cybercriminals, making it crucial for organizations to understand the potential liabilities they face. Beyond the immediate impact of a security breach, companies may also contend with legal and financial consequences if they fail to protect sensitive data adequately.

This article will help business owners identify and understand common attacks used by cyber criminals, helping to provide a greater level of risk management. To learn more about commercial liability insurance solutions, visit the U.S. Risk Cyber page.

Identifying Cyberattacks

As the business world employs digital technologies to assist with data management, production/manufacturing, and logistics, the threat of a cyberattack has grown rapidly. Here is a closer look at four primary types of cyberattacks looming over business digital assets:

1. Phishing

• What It Is: Phishing involves tricking individuals into revealing sensitive information, such as usernames, passwords, or credit card details, often through deceptive emails, messages, or fake websites. These messages appear to come from trusted sources, making them difficult to identify.
  
  
• How to Identify It:
  
  
  • Suspicious Sender Addresses: Phishing emails often come from addresses that closely resemble legitimate ones but include slight variations or misspellings.
  • Urgent or Threatening Language: Many phishing attempts use urgent language like “Your account will be locked” or “Immediate action required” to prompt users into acting without thinking.
  • Unexpected Attachments or Links: Emails containing attachments or links that don’t match the context of the communication can be red flags. Hovering over links to check the actual URL before clicking is a common way to spot phishing.
  • Grammatical Errors: Many phishing messages contain grammatical mistakes or odd phrasing, indicating that they may not be from a legitimate organization.

2. Ransomware

• What It Is: Ransomware is malicious software that encrypts a victim’s data, rendering it inaccessible until a ransom is paid. It can spread through infected email attachments, compromised websites, or unsecured network connections.
  
  
• How to Identify It:
  
  
  • Locked Files or Inaccessible Systems: The most obvious sign of a ransomware attack is the sudden inability to access files, folders, or entire systems, often accompanied by a ransom note.
  • Pop-Up Messages or Ransom Notes: Ransomware typically displays a message that demands payment for a decryption key, often specifying the payment method (usually cryptocurrency) and providing a countdown.
  • Unexpected System Slowdowns: Before ransomware fully activates, it may cause systems to slow down as it encrypts files in the background.
  • Increased Network Traffic: Ransomware may communicate with a command-and-control server to receive instructions, potentially resulting in unusual spikes in outbound network traffic.

3. Distributed Denial of Service (DDoS) Attack

• What It Is: A DDoS attack floods a targeted server, website, or network with traffic, overwhelming its capacity and causing it to become slow or unavailable. Attackers often use botnets—a network of infected computers—to generate this traffic.
  
  
• How to Identify It:
  
  
  • Website Downtime or Slow Performance: An unexplained slowdown or a website becoming unresponsive can be an early indicator of a DDoS attack.
  • Sudden Traffic Spikes: Monitoring network traffic can reveal abnormal spikes, especially from unusual geographic locations or repeated requests from the same IP address.
  • Logs Showing Multiple Requests: Web server logs may show a high volume of repeated requests from the same source or a sudden influx of requests to a specific page or resource.
  • Service Port Exhaustion: A DDoS attack can exhaust available service ports, causing certain applications or services to fail or hang.

4. Insider Threat

• What It Is: An insider threats involves employees or contractors misusing their access to data, systems, or networks, either intentionally or unintentionally. These threats can be particularly damaging because insiders already have authorized access to sensitive areas.
  
  
• How to Identify It:
  
  
  • Unusual Login Times or Locations: Monitoring login activity can reveal employees accessing systems at odd hours or from unexpected locations, which may indicate malicious intent.
  • Unexplained Access to Sensitive Data: Reviewing access logs can help identify users who are accessing files or databases beyond what is required for their job responsibilities.
  • Increased Data Transfers or Downloads: A spike in data transfers, particularly to external devices or cloud storage, could be a sign of an insider threat.
  • Changes in Behavior or Disgruntlement: Insider threats can also be detected through changes in behavior, such as employees expressing dissatisfaction with the organization or engaging in uncharacteristic activities, like frequently asking about sensitive projects or data.

By recognizing these indicators, organizations can take early action to mitigate the impact of cyberattacks, implement stronger security measures, and address potential liabilities arising from these incidents.

Fighting Back Against Cyber Criminals

The internet is teeming with information about protecting against cyberattacks, including information on updating software, using antivirus tools, maintaining password discipline, and more. What is less understood is the role of cyber liability insurance in providing a risk management framework.

Commercial cyber liability insurance is a crucial risk management tool for businesses of all sizes and industries, offering protection against the financial fallout of cyberattacks. This type of insurance typically covers costs related to data breaches, such as notification expenses, credit monitoring for affected individuals, and legal fees. It can also provide coverage for ransomware payments, data recovery, and business interruption losses caused by cyber incidents like DDoS attacks.

Additionally, cyber liability insurance often includes support for forensic investigations to determine the source of an attack and assistance with crisis management and public relations efforts to mitigate reputational damage. By offering this broad range of protections, cyber liability insurance helps businesses recover more quickly from cyber incidents while minimizing the potential for prolonged financial or legal consequences. ◼