Cyber risks range from legal liability and computer security breaches to privacy breaches of confidential information. Data breaches typically involve the intent to either copy, extract or destroy data. However, the risks that companies face transcend simple data incidents and often include the broader range of perils associated with the structural vulnerability of our economy to failures of technology generally. Further risks include cyber extortion, cyber terrorism, loss of revenue due to a computer attack, recovery costs, reputational damage and supply chain disruption.
One event can often trigger a loss that involves multiple risks. For example, a cyber attack can lead to the loss or damage of data that is important to a company’s ability to conduct business and generate revenue while also simultaneously negatively impacting its reputation. The same company could also face regulatory actions or financial penalties if it failed to take required risk mitigation or protection actions.