How cyber attacks happen: Why Irish businesses need cyber insurance

We all understand the impact on a business if a property loss occurred, but how do cyber attacks happen, and what’s the fallout? How would your business be affected? What would the financial impact be? And how prepared are you to respond?

Cybercrime is no longer a distant risk — it’s happening here and now in Ireland, and businesses of all sizes are being targeted. In fact, according to a new survey nearly 40% of Irish companies have experienced at least one cyber-attack in the past five years, and one in eight have suffered a direct financial loss!

How cyber attacks happen in Ireland:

Common attack types include:
- Cyber extortion (ransom demands to avoid data breaches)
- Phishing attacks
- “Man in the middle” breaches where criminals intercept internal communication

Reported consequences include:
- Loss of intellectual property
- Supply chain disruption
- Reputational damage
- Business downtime

Implementing robust cybersecurity practices is essential for protecting your business from cyber threats, but despite the scale of the threat, only 39% of businesses train staff in cyber security and just 41% perform regular system checks. Less than half use multi-factor authentication (MFA) for remote employees which is a simple step that can significantly reduce risk.

Employee Training
Multi-Factor Authentication (MFA)
Regular Software Updates
Strong Password Policies
Data Encryption
Network Security
Backup Data
Access Control
Incident Response Plan

The role of cyber insurance

While technology and training are essential, insurance plays a key role in protecting businesses proactively to assist in incident prevention, but also from the financial fallout of cyber incidents and providing support and access to security and IT professionals.

Typical covers under a standalone cyber insurance policy include:

Human error

An employee making a mistake. For example, leaving confidential information on display to customers. Or, another example could be attaching an incorrect file to an external recipient.

Ransomware

Example would be clicking on a malicious link in an email, inadvertently downloading ransomware software into the business network. This software in turn encrypts all financial data, rendering it inaccessible until a “ransom” is paid. The business has no ability to function until said ransom is paid, or their system otherwise unlocked.

Phishing

Clicking malicious links also runs the risk of other harmful software being downloaded, Phishing software, once downloaded, scours the system for valuable confidential information – this gives the hackers access to passwords, accounts. Phishing software is usually highly efficient at finding profitable confidential information.

Unauthorised access

This can occur from a variety of directions. For example, a hacker could gain access to the network through a loophole in the security. It could also be a case of a low-level employee accidentally being able to access data restricted to management.

Malware and viruses

When malware or viruses enter the computer network, they quickly get to work disrupting everything. They can cause screens to freeze, machines to become unresponsive, or even to shut down altogether. With new viruses being developed every day, even the strongest anti-virus software must be regularly updated. Just one infected machine can easily cause the entire network to go down.

Data breaches

Data breaches can occur in several different ways – some malicious, some accidental. For example, an email containing confidential customer financial information being sent to the wrong recipient. Whether it’s through poor network security or employee error, the cost can be equally damaging. Data breaches can result in legal action because of failure to comply with data protection legislation, so are to be avoided at all costs.

Impersonation

In the right circumstances it could be very easy for one person to impersonate another digitally, given the right information. For example, a high-ranking employee accidentally leaves their Intranet log-in details on the train. A random person finds them, and is then able to access the system, posing as the employee. They can then either steal confidential data, or deliberately disrupt the system.

Rogue employees

Employees can turn malicious for several different reasons. And can be devastating depending on the level of access to the system the rogue employee has.

Misleading communications

Example, a business receives an invoice for raw materials. The numbers add up and it looks authentic, so the invoice is paid without further question. However, the sender has simply engineered the invoice from data they have found or stolen.

And yet, cyber insurance penetration remains relatively low in Ireland, especially compared to other markets. That’s starting to change, as more businesses understand how cyber attacks happen and recognise the need to make cyber risk part of their broader insurance and compliance strategy.

Regulatory pressures are growing Too

Businesses must also be aware of their legal obligations. Failing to report a cybercrime to the National Cyber Security Centre (NCSC) can result in fines of up to €10 million — adding regulatory risk to an already high-stakes environment.

How LHK Group can help

At LHK Group, we help businesses assess their exposure, select tailored cyber insurance policies, and integrate cover into their wider risk management strategy. With a deep understanding of the evolving cyber risks, our experienced team can provide expert advice on potential exposures and procuring cyber liability insurance.