Malware / Malware Attack

Q: What Type of Insurance Covers Malware Attacks?

Cyber liability insurance (not general liability) is designed to help when malware strikes. It pays for things like: Investigating the attack Notifying customers Paying ransoms for data Credit monitoring for affected parties Public relations support Lost income during downtime

What Is a Malware Attack?

A malware attack is a cyberattack where malicious software executes unauthorized actions on the victim’s system.

Malware is a word derived from two words: malicious + software

mal = malicious
ware = software

It’s one of the most common types of cyberattacks and can cause real headaches: data breaches, stolen client information, lost business, and more. But with the right protection, you can recover from malware attacks quickly and confidently.

How Can a Malware Attack Hurt My Small Business?

A malware attack can halt your business — stealing data and causing customers to lose trust. Here’s how it can affect you:

Downtime and lost sales: Systems slow down and lock up, and bookings stall
Data loss or theft: Customer info and intellectual property gets stolen or encrypted
Recovery costs: IT cleanup, data restoration, and sometimes new hardware or software
Legal and compliance issues: You may need to notify affected customers and pay potential penalties
Reputation hit: You may need to offer refunds or discounts to rebuild trust with customers
Ransom and extortion: Hackers may ask for payment to unlock your data
Contract risk: Missed deadlines can lead to lost deals

Did you know? Attackers often use automated scans to find easy targets, like outdated software or weak passwords. They look for anyone unprotected — that’s why small businesses are often hit the hardest.

Studies of small businesses find attackers scan broadly and pick the lowest-hanging fruit, which is often under-resourced SMBs (small- to medium-sized businesses). SMBs show up heavily in breach data, so it’s crucial to protect your business and all the hard work you’ve put into it now.

Will General Liability Cover the Cost of Malware Attacks?

Unfortunately, no, general liability insurance typically does not cover malware attacks or other cyber incidents. It’s made for bodily injury and property damage caused by your business.

That’s where cyber liability insurance comes in — specifically helping you recover from digital attacks on your business.

General Liability vs Cyber Liability Insurance: What’s the Difference?

General liability insurance covers (mostly) physical damages caused by your business, while cyber liability insurance handles the online aspects of your operations.

	General Liability (GL)	Cyber Liability
Designed to cover	Bodily injury, property damage, and personal and advertising injury claims	Cyber incidents, like malware, ransomware, data breaches, or privacy claims
Malware/ransomware attack costs	❌	✅ Forensics, recovery, and response
Business interruption from a cyber event	❌	✅ Often included with a waiting period
Online third-party privacy/liability claims	❌	✅ Defense, settlements, and judgments
Notification, credit monitoring, and PR help	❌	✅ Common first-party benefits
Common exclusions	Electronic data/cyber claims	Prior-known events, poor security, and certain cyber war acts

Designed to cover

General Liability (GL): Bodily injury, property damage, and personal and advertising injury claims

Cyber Liability: Cyber incidents, like malware, ransomware, data breaches, or privacy claims

Malware/ransomware attack costs

General Liability (GL): ❌

Cyber Liability: ✅ Forensics, recovery, and response

Business interruption from a cyber event

General Liability (GL): ❌

Cyber Liability: ✅ Often included with a waiting period

Online third-party privacy/liability claims

General Liability (GL): ❌

Cyber Liability: ✅ Defense, settlements, and judgments

Notification, credit monitoring, and PR help

General Liability (GL): ❌

Cyber Liability: ✅ Common first-party benefits

Common exclusions

General Liability (GL): Electronic data/cyber claims

Cyber Liability: Prior-known events, poor security, and certain cyber war acts

What Type of Insurance Covers Malware Attacks?

Cyber liability insurance (not general liability) is designed to help when malware strikes.

It pays for things like:

Investigating the attack
Notifying customers
Paying ransoms for data
Credit monitoring for affected parties
Public relations support
Lost income during downtime

Area	Cyber Liability Can Cover	Notes
Incident response & forensics	✅	Sublimits often apply
Data restoration & recovery	✅	Backups/security controls may be required
Ransomware / cyber extortion	✅	Payment conditions, consent, and legality checks
Business interruption (lost income)	✅	Waiting period plus proof of loss needed
Privacy liability (third-party claims)	✅	Defense and settlements/judgments
Regulatory fines/penalties	✅ Sometimes	Jurisdiction-dependent; policy-specific
Known/prior incidents and poor security	❌	Prior knowledge or unreasonably insecure systems are often excluded
Contractual liability	❌	Unless specifically endorsed
War/terrorism-type cyber acts	❌	Often excluded

Area: Incident response & forensics