The concept of cyberterrorism may sound like a subject for politicians, the military or the latest Netflix release. But in our highly connected world, cyberterrorism — the malicious use of computers and information technology (IT) to cause harm and disruption — can extend past political borders and Hollywood scripts and into our homes and offices. That’s why it’s important to know what cyberterrorism is and how your business may be at risk from a cyber attack.

Learn what cyberterrorism looks like, how cyber attacks can affect businesses like yours, and how cyber liability insurance can help.

What is cyberterrorism?

There is no single definition of cyberterrorism. Various organizations and countries throughout the world view cyberterrorism differently. The Center for Strategic & International Studies defines cyberterrorism as the use of computer network tools to shut down critical national infrastructures or to coerce or intimidate a government or civilian population.1

While the Federal Bureau of Investigation (FBI) indicates that the outcomes of large-scale computer hacks must result in violence to be classified as cyberterrorism, other organizations don’t consider physical harm to be a factor. For example, the North Atlantic Treaty Organization (NATO) defines cyberterrorism as “a cyberattack using or exploiting computer or communication networks to cause sufficient destruction or disruption to generate fear or to intimidate a society into an ideological goal.”2

If you think this sounds like the work of spies and secret agents, you’re not alone. Some of the most advanced hackers in the world carry out cyberterrorism to cause harm, disruption and fear that can lead to financial loss, physical injury and chaos on a global scale. But, as many businesses have learned the hard way, the impacts of cyberterrorism can often hit much closer to home.

How does cyberterrorism impact small businesses?

While governments protect individuals and businesses from large-scale cyberterrorism plots, smaller cyber attacks are likely to fall through the cracks. In a recent report, the Ponemon Institute found that two-thirds of small businesses have experienced a cyber attack.3 In addition, these attacks can be a financial drain, resulting in legal fees and financial losses averaging hundreds of thousands of dollars.

Most small businesses aren’t the target of international cyberterrorism acts, but the ripple effects of such aggressions can still harm them, or they can fall victim to more minor cyber attacks. For example, a large-scale hack of financial institutions could expose a company’s sensitive account information, risking monetary loss.

On the other hand, a cyber hacker could target a small business with a phishing scam or ransomware attack to steal funds or information. In these cases, a hacker will trick a company employee into sharing personal account information or infect a network of computers with a virus, holding their information hostage for a ransom.

How small businesses can combat cyberterrorism

There is little you can do to combat large-scale acts of cyberterrorism. Leave that to government and military personnel who protect citizens from digital threats. However, as a small business owner, you can take measures to protect yourself and your company from the effects of cyberterrorism and targeted cyber attacks. Here are some recommended steps:

  • Install anti-phishing web plug-ins, firewalls and other virus security software on your computers and devices.
  • Know how to recognize a phishing email and never share personal information or passwords online.
  • Update your passwords regularly and change passwords immediately if you are involved in a data breach or hack.
  • If you are the victim of a data hack, consider signing up for identity theft protection services or temporarily freezing your accounts.
  • Monitor your online and financial accounts regularly and check for signs of suspicious or fraudulent activity.
  • Educate employees about cyber attacks to raise awareness and prevent company-wide attacks.
  • If you fall victim to a cyberattack, report the crime to your State Consumer Protection Office and local police.

Insurance and cyberterrorism

Cyber liability insurance protects individuals and businesses from damages associated with online attacks like cyberterrorism. It covers your business from liability claims related to leaked information and personal losses from the attack.

Cyber insurance policies can include both first- and third-party coverage, meaning you’re not only protecting yourself and your business, but also your customers.

First-party coverage helps pay for your expenses when your data is lost or damaged. It can also defray your loss of income, help repair your company’s public image and help cover the expense of notifying affected customers and providing credit monitoring services. These services can sometimes be added to a general liability policy as a “data breach” coverage extension.

Third-party liability coverage protects your business against lawsuits by injured parties. It can provide help with legal fees, regulatory costs, damages and settlements if your customers blame you for their loss.

While cyber insurance does not shield you from all the repercussions of liability, such as third-party bodily injuries or third-party property damage, it covers more than data breach insurance. Data breach insurance only provides first-party coverage for losses stemming from a data breach, hack, cyber theft, or a similar security incident.

Leave the hacking damage to Hollywood

Businesses depend on online tools to keep operations moving smoothly. However, hackers can break into online networks, jeopardizing the safety and finances of your business. Take steps to fight hackers and neutralize the threat of damages from a cyberattack.

You’ve educated yourself on the definition of cyberterrorism and how it can impact small businesses. Now, safeguard your business and stay protected with small business insurance from Thimble.

Click “Get a quote” or download the Thimble mobile app, answer a quick set of questions, and get cyber insurance within minutes. 


  1. Center for Strategic and International Studies. Assessing the Risks of Cyber Terrorism, Cyber War and Other Cyber Threats. 
  2. IOS Press. Ebook: Responses to Cyberterrorism. ​​
  3. The Ponemon Institute. The 2019 Global State of Cybersecurity in Small and Medium-Sized Businesses.