Cybersecurity risks are critically challenging for businesses, with the potential to cause severe business disruption and financial impact.

Understanding the threats and how cyberattacks work can help you keep hackers at bay and better prepare and protect your business.

The "Domino Effect"

What is often not understood prior to a cyberattack is that the negative fallout of an incident can create a rapid downward spiral. As business becomes progressively impaired, reparation costs quickly escalate.

  • The first domino — lost business cost. When websites or computer systems are attacked and taken offline, virtual storefronts may be rendered unusable by customers, and transactions may not be able to be processed. Though brick and mortar stores may still be open, with the virtual enterprise “closed,” customers and clients go elsewhere.
  • The second domino — lost customers and reputation cost. If personal customer information (such as credit card numbers) is stolen, it shakes consumer confidence. A breach can be compounded by bad press, which can cripple brand reputation and lead to more devastating customer attrition.
  • The third domino — restoration costs. After any cybersecurity incident, the tasks of restoring digital data, software, computer systems — and reputation — require money, time, personnel, and often costly external expert resources.
  • The fourth domino — legal and settlement costs. When a cyberattack negatively impacts customers, vendors, suppliers, or others there can be legal ramifications. Claims can be extremely costly and time consuming to defend.



When these dominos start to fall, the increasing costs may bring a business to the point of bankruptcy.



Hacker at a computer

How Cyber Criminals Gain Entry

There are several ways that cyber criminals can gain access to a company’s website or internal server to steal data or otherwise attack a business. These include:

  • Insufficiently securing electronic devices that have legitimate server access, such as computers or tablets.
  • Exploitation of weak employee passwords or lax password precautions.
  • Taking advantage of a power or internet service failure (that may or may not be caused by bad actors).
  • Active attacks that exploit security flaws and often employ sophisticated malware or techniques, like ransomware, credential stuffing, and phishing.



Protecting Your Business from Cyberattacks

Although stopping cyber criminals may seem like a formidable task, there are a handful of simple measures that companies can use to create their own cyber risk management program and limit their exposure.

  • Update IT equipment and security software — Outdated operating systems and computers, outdated or unpatched software are easily breached by criminals.
  • Diligently monitor networks — Companies can limit damage if network abnormalities are caught quickly. A cybersecurity expert can identify high risk areas, and there are security software offerings that can offer monitoring solutions.
  • Educate employees on cybersecurity vigilance — According to a Chubb survey, only 31% of respondents report that their employer provides them with annual company-wide trainings or updates*. Make sure your staff understands the important role they have in preventing a cyber breach and help them establish positive and secure habits with formal, enforced written cybersecurity policies and regular training.
  • Require good password hygiene — This is an integral part of any cybersecurity program. Passwords should be strong (e.g., a mix of letters, numbers, and symbols) and should be frequently changed. When employees leave the company, their credentials should be automatically revoked.
  • Create a cyber incident response plan — Some incidents can be mitigated with a prepared response plan and a team of both internal and external cyber incident responders. With a strategy and experts in place, response to and resolution of an incident can occur more quickly.
  • Purchase cyber insurance — While proactive measures are essential, a back-up plan is required to better safeguard against cyber risks. A good cyber insurance program is more than just a financial loss mitigation tool — it can help a company better understand how to prepare ahead of a potential cyberattack, and offer resources and partners, such as cybersecurity trainers for employees.



*Chubb Cyber Risk Survey 2019. Conducted between May 7, – May 17, 2019; results are based on 1,223 completed surveys.

Learn More: Cyber Risk Management
Our industry experience can help you protect against cyber risks.
Our industry experience can help you protect against cyber risks.
This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice.

Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.chubb.com. Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall's Mill Road, Whitehouse Station, NJ 08889-1600.

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