DENIAL OF SERVICE ATTACK

Denial of Service Attack – Cyber Coverage Explained

In plain language: A Denial of Service attack (dos attack) is a strategic effort by cybercriminals attempting to disrupt the normal functioning of a network, service, or website by overwhelming it with a flood of internet traffic.

Technical definition: In a denial of service attack, assailants disrupt an entity's network services by overwhelming the network with more requests than it can handle. It's seen in various cyber liability insurance forms and is a significant concern in the realm of cybersecurity. The attack types can vary, but a prevalent form is the distributed denial-of-service (ddos) attack, where multiple infected systems target a single system.

The internet is an open ecosystem, but with freedom comes risks. Cybercriminals use denial of service attacks to disrupt business operations, cause reputation damage, and even lead to significant financial losses.

TL;DR

A Denial of Service attack is a method used by cybercriminals to disrupt the functionality of a network, website, or service.

It is crucial in day-to-day agency work due to the danger it posses to clients' online platforms and the resulting financial impact.

Common pitfall: many assume denial-of-service to only occur in large businesses when small businesses can also become a target.

Quick win: Make sure your client implements proper security measures, including protection software and a response plan.

What Is Denial of Service Attack in Insurance?

In insurance, a denial-of-service attack refers to scenarios in which an insurance policyholder's systems are intentionally overwhelmed by external electronic traffic, rendering them inaccessible. The attacker could flood the system with superfluous requests, crash a system or network, or cause an exploitation of a system bug to execute a denial of service attack.

Since it occurs in cyberspace, we often connect denial-of-service with Cyber Liability Insurance. This policy type can help cover the financial losses associated with a denial of service attack.

Potential losses from denial-of-service attacks range from the loss of business income during the period the systems are down to the cost of hiring network administrators to regain control of the systems. Agencies should be aware that not all Cyber Liability Insurance policies automatically cover denial-of-service attacks, so it is important to review the specific policy.

Key Related Terms to Know

DDos Attack – A type of denial of service attack where multiple compromised systems are used to flood the target.

Syn Flood – A method of denial of service attack where an attacker sends a series of syn requests to a target's system in an attempt to consume enough server resources to make the system unresponsive to legitimate traffic.

Smurf Attack – A type of denial of service attack that floods a target system via spoofed broadcast ping messages.

Incident Response – A plan implemented by a company to address and manage the aftermath of a security breach or cyberattack.

Disaster Recovery Plan – A documented procedure to recover and protect a business IT infrastructure in the event of a disaster.

Common Questions About Denial of Service Attack

How can insurance protect from Denial of Service Attacks?

Insurance policies such as Cyber Liability Insurance can cover the costs associated with a denial of service attack, including lost business income and recovery expenses. For example, if your small business client experiences a ddos attack causing their online store to shut down, their policy could potentially cover the loss of income during the downtime and the costs associated with hiring a network administrator to get the website running again.

How common are Denial of Service Attacks on small businesses?

Small businesses are increasingly becoming targets for denial of service attacks. Cybercriminals exploit the fact that small businesses often don't have the level of network detection and response usually associated with larger organizations. Agencies should emphasize the importance of having adequate cyber security measures and insurance coverage to their small business clients.

Denial of Service (DoS) Attack vs. Distributed Denial of Service (DDoS) Attack

The key difference between a dos attack and a ddos attack lies in the number of source systems used to launch the attack.

Comparison Area	Denial of Service (DoS) Attack	Distributed Denial of Service (DDoS) Attack
Primary use case	Overloading a target system with traffic from a single source	Overloading a target system with traffic from multiple compromised systems
Coverage / concept type	Single-source attack	Multi-source attack
Typical exclusions	Attack must overload system and result in denied service	Attack must overload system and result in denied service, but can involve multiple sources
Who is most affected by errors	Targets of the attack, typically businesses with online platforms	Targets of the attack, often large corporation with multiple Internet-facing assets
Common mistakes	Assuming the attack can only come from multiple sources	Underestimating the scale of potential traffic involved

Real Claim Examples Involving Denial of Service Attack

Scenario 1: An online retail client suffered a loss of income due to a denial of service attack over the holiday season, one of their busiest periods. Their website was overloaded with traffic, rendering it unreachable by customers for several days. The ddos attack not only led to direct loss of income but also damaged their reputation.

Scenario 2: A small graphic design agency's website was rendered inaccessible due to a dos attack, which caused a significant service outage. Despite the attack being on their internet service provider, their loss of service prevented them from sending final projects to their clients, leading to penalties for missing deadlines.

Scenario 3: A local bank's online systems were overwhelmed with a denial of service attack, causing a major disruption in online banking services. The financial losses from the attack ended up significantly higher than anticipated, as the attack had occurred during a key trading period, causing significant lost transaction fees.

Limitations and Common Mistakes

Denial of service attacks do not apply to physical damage–they are strictly digital.

Overestimating their system's capacity to handle traffic can lead to an effective DoS attack.

Assuming denial of service attacks only come from unknown sources– these attacks can also originate from disgruntled employees or competitors.

Neglecting the importance of regular system checks up can lead to vulnerabilities in the security system being exploited.

How to Explain Denial of Service Attack to Clients

Personal Lines client Think of a denial of service attack like a crowded shop. If too many people enter at once, it becomes difficult for others to get in, and the service drastically slows down. This the same way a cybercriminal overloads your website with too much traffic during a denial of service attack–making it hard for real customers to access your services.

Small Business owner A denial of service attack is when an attacker essentially blocks your online door with too much traffic, stopping your customers from entering. It would be like if a group of people stood in your store's entrance and didn't let anyone in or out–your real customers can't get through, which can cause serious disruption to your business.

CFO or Risk Manager In a denial of service attack, cybercriminals flood your network system with so much traffic, valid requests to access your business's online services are lost in the congestion. Similar to a highway during rush hour–too many cars results in a traffic jam, slowing motion to a crawl. The financial consequences can be significant, especially if the disruption is prolonged or hits during a busy period.