The Cloud: Just Another Computer Vulnerable to Cyberattacks



As a C-level executive, you most likely assume that you’ve solved your “cyber” problems by moving to “the cloud.” Unfortunately, the cloud presents just as many, if not more, potential cyber losses than other possible options. If your information is easily accessible to you, then it’s easily accessible to cybercriminals, as well.

Why is the cloud vulnerable? Because the “cloud” is a buzzword for another computer at another location. That’s all the cloud is.

While it’s true that cloud providers leverage a singleness of focus to put strong security in place, the weak point is still human users. The vast majority of all cloud security failures are due to client (read human) error.

The worst mistake you can make as a company leader is to relegate your data to a cloud service provider and believe that you have removed the potential for major financial loss from a cyber attack. You haven’t!

Read more below to understand how or contact Cyber Armada to schedule a Cyber Risk Consultation for the best possible guidance on cyber risk management.

What is the Cloud

The “Cloud” is a buzzword, similar to “Cyber.” These two terms share something in common because they remain a mystery to most businesses. You are simply using the cloud to store your data, like renting a storage locker, file cabinet, or bank vault secured by a key. And the cloud is simply another computer, or computers, at another location.

Transferring your Data to a Cloud Server

Some Advantages of the Cloud:

  • Lower Cost and Scalability. Quick and easy upgrades by adding memory and disk space.
  • Fast, Easy Access to Information and Data Regardless of Personnel Location.
  • Stability. Software problems are isolated from your environment.
  • Website Speed. A cloud-hosted website will run faster.
Most Common Cause of a Cloud Data Breach – Human Error

Reports indicate that the vast majority of cloud security failures are the result of human error and not the cloud provider. This means that cybercriminals gain access to cloud storage by stealing user credentials (passwords) or exploiting misconfigurations in the tools that transfer data to the cloud.

Credential Theft

Many cloud breaches are caused by simple credential theft, such as username and password logins. Cybercriminals typically steal credentials through phishing attempts that trick users into entering their info into malicious systems that look to be legitimate. Essentially, cybercriminals convince users to hand over the keys to their cloud “vault,” much like giving someone the combination to your safe.

Once credentials are obtained, the criminal has open access to your system. In this scenario, the cloud provider is not breached; the cyber attacker is simply handed the keys to the castle.

Any breach that involves accessing data in the cloud can be referred to as a “Cloud Breach.” For example, if a retail store has inventory stolen from their unlocked warehouse or their unlocked storefront, the cause and result of the theft remains the same as a stolen-credential cloud breach, regardless of location. Data theft is theft.


Organizations often engage with cloud integrations companies that offer tools that transfer data straight from the user’s systems to the cloud environment, creating a seamless flow. Cloud integration can simply be thought of as a conduit or pathway that transfers data to and from the cloud.

Many cloud breaches are the result of misconfigured integration tools that cause weak points in security. Since the tools are typically customized for each client by software engineers, this leaves them vulnerable to human errors. These misconfigurations (errors) may lead to the failure of software patching, weak firewalls, or weak user access controls, which cybercriminals exploit.

The easiest way to consider these misconfigurations is to visualize a “truck” transporting data to the cloud isn’t properly locked. And thus, data can be stolen.

Before you flip the switch and transfer your data to the cloud, be sure to properly vet your cloud integration partner and verify they have sufficient security measures to protect your data adequately.

Remember, even with strong security measures, human error is still the most significant risk. No technical security can mitigate the risk of human error.

Data breaches – inside and outside of the cloud environment -- have a severe financial impact on companies

The 2019 Ponemon Institute Report on the Global State of Cybersecurity in Small and Medium-Sized Businesses (SMBs) indicates that 76% of SMBs have experienced a cyber attack and 69% of SMBs have experienced a data breach (cloud or otherwise). Data breach costs for SMBs are significant -- average data breach costs for SMBs is $3.14 million. These data breaches can have a devastating impact on your balance sheet if you do not have cyber insurance protection.

Further reports indicate the migration of middle-market data to the cloud has increased in recent years due to security issues. Thus, it makes sense that we will see more data breaches in which data is stored in the cloud with a cloud service provider. As we’ve indicated here, you are responsible for educating your employees to reduce the human error causing data breaches, including cloud-based data breaches.

Is Cyber Insurance Worth it?

Cyber insurance provides your company protection when faced with direct first-party costs that you incur after a data breach - in the cloud environment or your network. For example, forensic investigation, legal advice regarding your breach notification and regulatory obligations, the cost of breach notification, credit monitoring and ID theft insurance for customers, public relations expenses, and loss of profits and extra expenses caused by business interruption.

After a data breach, your company may face actions brought by impacted third parties. The coverage for third-party costs comes into play when your business is faced with a claim seeking damages by injured parties, if you become embroiled in a lawsuit, or if you receive notification of regulatory action or fines under state or federal laws.


You do not need to face these daunting scenarios without the help of the incident response team provided by cyber insurance.

Remember, an essential part of your cyber risk management plan includes comprehensive cyber insurance to protect your balance sheet and solvency after a cyber attack.


  • The cloud doesn’t remove the risk of human error.
  • Technology can’t mitigate the risk of human error.
  • Cyber insurance is an active choice for cyber risk management. It’s a mistake to consider it as merely a “cost-of-doing-business”.
  • Human error is difficult to mitigate. The best option for proactive companies is to transfer the risk.
  • Cyber insurance assures that your financial situation and reputation remain as close to pre-attack levels as possible.

Comprehensive cyber insurance is the only defense your balance sheet has against serious cyber attacks.

Contact Cyber Armada today to examine how your company faces potential financial losses due to the use of cloud services. Contact us at 888.727.6232.

Next Article

Watch for our next article on the importance of cyber insurance coverage and ransomware attacks during COVID-19.

This article is made available for informational purposes and is not intended to be a substitute for professional or legal advice. No attorney client relationship is formed or implied between you and the authors(s) or Cyber Armada Insurance.

Topics: Data Breach Cyber Insurance Cloud

Cyber Armada Team
Posted by Cyber Armada Team on Mar 25, 2020

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