During Cybersecurity Awareness Month, it’s impossible to ignore the impact artificial intelligence is having on the cyber threat landscape. AI is a double-edged sword—it’s arming cybercriminals with new capabilities while giving organizations powerful new ways to defend themselves.
Here is what businesses need to know about AI-enabled threats, real-world cyber claims and the security controls that can reduce their risk.
What is cybersecurity awareness month?
Every October, governments, businesses, and security organizations around the world come together for Cybersecurity Awareness Month. The initiative began in the United States in 2004 and has since grown into an international effort to help individuals and organizations understand online risks and take practical steps to stay safe.
In Canada, the Canadian Centre for Cyber Security and the Get Cyber Safe campaign promote the month. Its purpose is simple: to help individuals and organizations understand online risks and take practical steps to stay safe. With AI changing how attacks are carried out, this year’s reminder feels especially timely.
How AI is changing cybersecurity threats
AI is helping cybercriminals create faster and more scalable attacks. Phishing emails are now more convincing, free of the spelling errors and awkward phrasing that once gave them away. Additionally, social engineering attacks are harder to detect, with tools like voice cloning and deepfakes creating entirely new challenges for businesses. As a result, attacks that once required significant technical expertise can now be carried out faster and at a greater scale.
How AI is strengthening cyber defenses
Thankfully, however, the news isn’t all bad: AI is also strengthening cyber defense. Security teams are using AI-powered tools to detect threats, identify unusual activity, and respond to incidents more quickly than traditional methods allow. When combined with human oversight and established security controls, these tools can help organizations detect problems earlier and limit the damage.
What cyber insurance claims look like in the real world
Cyber incidents can disrupt operations, trigger costly professional services, and create losses far beyond the IT department. Consider a ransomware attack on a manufacturing company: its systems are encrypted overnight and production grinds to a halt for several days. From there, the bills start piling up for the following:
- Forensic investigations
- Legal counsel
- Business interruption losses
- Specialized ransomware response services
You may also consider cases of business email compromise, such as where an employee receives what looks like a routine payment request from a trusted vendor and unknowingly sends funds straight to a fraudster’s account. Data breaches like this carry their own heavy price tag. When a threat actor gains access to customer or employee information, the fallout often includes:
- Notification costs
- Legal fees
- Regulatory investigations
- Credit monitoring for those affected
- Litigation
Newer threats are raising the stakes even further. Criminals can now use AI-generated voice cloning and deepfake technology to impersonate executives, convincing employees to authorize wire transfers or hand over sensitive information they would never share with a stranger. Even a business with strong security of its own isn’t immune, since a third-party vendor breach, such as an incident at a software provider or cloud vendor, can disrupt operations for every customer who relies on that service, leading to lost revenue and unexpected expenses.
These examples show that cyber risk is a business risk that can surface in many forms. As such, understanding the losses and types of claims that can follow ransomware, fraud, data breaches, and third-party incidents is a vital first step in planning how to protect your organization.
Key ways organizations can improve their cybersecurity
Many of the cyber claims aren’t the result of highly sophisticated attacks. More often, they begin with a stolen credential, convincing phishing email, or preventable security gap. No organization can eliminate cyber risk entirely, but several key steps can significantly reduce the likelihood and severity of an attack:
- Implement multi-factor authentication (MFA) across all critical systems
- Provide regular employee cybersecurity awareness training, especially around phishing and social engineering
- Maintain offline or immutable backups and test recovery procedures regularly
- Deploy endpoint detection and response (EDR) tools to identify suspicious activity quickly
- Establish and practice a formal incident response plan before an event occurs
- Enforce strong password policies and limit user access based on business need
- Review how employees are using AI tools and put governance in place around sensitive company information
- Conduct regular vulnerability assessments and patch critical systems promptly
The impact on cyber insurance and risk management
From a cyber insurance perspective, AI presents both opportunity and risk. While it can improve operational efficiency and security, organizations must also consider data privacy, governance, employee training, and exposure to AI-enabled fraud.
Of course, it’s also important to note that AI does not replace strong cybersecurity fundamentals:
- Multi-factor authentication
- Employee awareness training
- Endpoint security
- Secure backups
- Incident response planning
As AI continues to evolve, the organizations that balance innovation with disciplined risk management will be best positioned to navigate the changing cyber risk landscape.
For brokers, insurers, and insureds alike, one thing is clear: AI is changing cybersecurity, but not the need for good risk management. In fact, as cyber threats become more sophisticated, strong cyber hygiene may be more important than ever.
Review your cyber insurance coverage
Wondering how AI-driven threats could affect your business, or whether your cyber coverage is keeping pace? Speaking with an experienced insurance broker, such as Cowan Insurance Group, can help you get started in answering this question. At Cowan, we can help you review your exposures, understand your coverage options, and connect you with the right risk management resources, so your organization is better prepared before an incident occurs.
