What Is A Data Breach?

A data breach is devastating for a business; from business interruptions to reputation harm and even potentially losing customers. Even though we’re all becoming more aware of the importance of cybersecurity and encryption, data breaches still occur. It’s not only the magnitude of the severity that matters – there are different categories when it comes to data breaches. But what exactly is a data breach? And how can a cyber insurance policy help to cover losses?

What is a data breach, and why are data breaches so common?

A data breach is any incident that results in the unauthorized access of data. The data can be in the form of anything from personal information to trade secrets, and it can be accessed by an individual or organization that isn’t supposed to have it. Data breaches are often the result of hackers, malware, or even human error, but they are also sometimes caused by insiders who have authorized access to the data.

Data breaches are common, particularly among large enterprises. In fact, the Identity Theft Resource Center (ITRC) reported that the number of data breaches in 2021 increased by more than 68% compared to the previous year. With so much sensitive data available on the internet, this isn’t surprising — but it does highlight the importance of having a solid cybersecurity strategy in place before you experience a breach.

What are common types of data breaches?

Malware attacks

Malware is short for malicious software that hackers use to infiltrate a victim’s computer system. In an attack, malware is implanted into a computer system through a link in an email or on a webpage and then runs through the victim’s computer. When malware runs through a system, it can steal sensitive information such as login credentials and financial account numbers without the victim’s knowledge.


Phishing is a common technique that relies on social engineering to steal credentials or financial information. It often involves a threat or an offer that’s too good to be true. Attackers pose as companies or government agencies in order to get unsuspecting individuals to reveal sensitive information. Phishing attacks can also include attacks that use malware or ransomware as a means of extracting payment for the release of compromised data.


Ransomware is a type of malicious software, or malware, designed to deny access to a computer system or data until a ransom is paid. Ransomware typically spreads through phishing emails or by unknowingly visiting an infected website. Once it’s on your device, the ransomware can lock you out of your data or threaten to publish or delete it unless you pay up. Ransomware attacks are becoming more common and more sophisticated. They often use advanced techniques to avoid detection and removal and can cause significant disruption and financial hardship for victims.

Unauthorized access

Data breaches often occur because employees don’t know how to identify suspicious activity on the company’s network. Hackers can use these vulnerabilities to gain unauthorized access and install malware on the company’s systems.

How can cyber insurance help me in the event of a data breach?

The first thing to consider is that cyber insurance provides money to help you recover after a data breach. In the event of a data breach, there are going to be costs associated with notifying affected individuals and recovering from the attack. If your network had to be shut down because there was an attack, you’ll want to get it back up and running as quickly as possible. Your insurance policy can help cover your legal costs if you’re sued by customers whose information was compromised in the attack.

The second thing to consider is that by obtaining a cyber insurance policy, they will require you to put risk prevention practices into place to keep the policy. In this way, they are helping you prevent being hacked in the first place. A good cyber insurance provider will keep you in the loop of current cyber security happenings and help you keep your business covered. A data breach is a crisis situation, but having cyber insurance in place can provide some peace of mind.

Cyber insurance policies, just like any other insurance policy, are designed to provide an added layer of protection should an unexpected event occur. Even the strongest security measures can’t keep breaches from occurring; it’s just too easy for hackers and malware to defeat sophisticated firewalls. However, if you have a cyber insurance policy in place, you can rest assured that your business won’t lose everything because of a data breach.

Merely preventing a breach isn’t enough; a strong cyber insurance policy protects your business from damage caused by a data breach.

Looking for more information?

A cyber liability policy can help cover your business and keep you updated with industry tips like this one. Get in touch with us today to learn more about cyber liability insurance coverage, or set up a no-obligation consultation with a commercial lines expert through TelaClient.com.

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