From Within: The Consequences of Insider Threats
Insider Threat Prevention

From Within: The Consequences of Insider Threats

Consider this: it’s not a question of if, but when, an insider threat attack will strike your company. A malicious insider, armed with legitimate access, can execute an insider attack. The aftermath? It can leave a lasting mark on your corporate reputation, intellectual property,  security team,  and employee morale.

Among the various types of insider threats, one that stands out is a disgruntled employee pilfering trade secrets, which can inflict significant damage on your company (or business partners). This can lead to a loss of reputation and competitive advantage in the marketplace. While you may have fortified your organization against internet dangers like malware or phishing attacks, what about the threats brewing within your organization, from an authorized user who deliberately undermines your company’s security protocols?

The Consequences of Insider Threats

With legitimate access to resources, knowledge of where sensitive data exists, and security controls, malicious insiders can cover their tracks much more quickly than external attackers and thus stay undetected for far longer.

Insider threat incidents, often overlooked, can wreak havoc on your company’s professional reputation and much more. How do you manage the aftermath of an insider threat incident? Let’s delve into some of the most significant risks and costs associated with insider threats. 

Critical Data Loss

Insider threats can put an organization’s critical data at risk. For example, a disgruntled employee could permanently delete data for code or design plans. A malicious insider could steal proprietary data via USB drives or overwrite existing critical data with trash values.

From customer information to financial records, a legitimate user with access to systems could steal or leak sensitive data critical to your organization’s operation. Beyond the implications of data loss, it could lead to hefty fines for non-compliance with data privacy regulations, for instance. Luckily, data loss prevention tools can prevent or mitigate the effects of data exfiltration.

Your role in preventing and recovering from insider threats is crucial. Do you want to entrust your critical data to just one employee? How open are you to storing your data in redundant locations to aid in recovery? Your organization’s security practices should match the importance of your critical data.

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Financial Impact

The financial impact due to insider threats is a significant concern for companies nowadays. Due to an insider data breach, an organization’s trade secrets can be revealed to outsiders through social engineering or human error, causing a massive financial loss through stolen funds or embezzlement.

Data breaches caused by malicious insiders can be costly and pose a massive security risk. In addition, the investigation, remediation, and potential lawsuits following an insider threat security incident can cost millions of dollars.

To limit the financial impact of an insider attack on your organization, improved security software and zero-trust policies should be followed across all departments. These strategies have proven to be effective in preventing and mitigating the effects of insider threats, giving you the confidence to handle such incidents.

Operational Impact

Malicious activity that comes from an insider threat instead of an external threat can often have a deeper operational impact. For example, an employee who abuses a user account and installs a virus in the production system can cause glitches in the production process, which can lead to defective products.

A cybersecurity incident involving a sophisticated sleeper virus could damage your company’s operations. As a result, your production capacity could be lowered, and your product market share could drop. To prevent operational impact, security procedures should be followed at every stage and lessen the potential impact of a malicious attack.

Legal Impact

Beyond the cost of prosecuting the criminality of an insider threat, there are other legal and regulatory costs, including fines for compliance failures or paying the costs of litigation from individuals affected by a data breach, like business partners.

An insider threat can create unforeseen legal problems and costs for the company through unauthorized access or stealing user credentials. For example, if a malicious employee runs software in a country that bans it, the organization is legally liable and may have to pay a fine for breaking the law as its employees do. 

For many organizations, the loss of intellectual property requires legal action, increased bills for attorney fees, and improved security compliance.

Loss of Competitive Edge

Imagine a malicious actor who causes an insider-related incident at your company. Production secrets are shared, and digital assets are lost. Your organization loses valuable data and assets and its competitive edge.

Due to insider threats, an organization’s plans to excel in the marketplace can be revealed to rival organizations or in the public domain. Your competitive edge is gone, and you may not recover it for long.

Years of research could be in vain if a data leak occurs. If your company loses its ability to compete in its niche, the resulting implications could destroy it.

Loss of Reputation

If your organization’s reputation is everything, then think about how severely news of a security breach caused by an insider will damage it. Customers, shareholders, and business partners can lose trust, leading to declining sales and brand loyalty. Rebuilding and repairing that trust can be a long and arduous process.

Malicious activity from an external threat can be explained, but an intentional insider threat often causes more significant reputational damage because it questions your organization’s security effectiveness.

For example, a network administrator may abuse their access rights by stalking an organization employee on a personal level. Or, customer data may be compromised by a malicious insider who uses it for personal gains. Cases like this may only come to light after a long period, degrading the organization’s reputation in the market.

Intellectual Property Theft

Your company’s trade secrets are its most valuable asset. How much damage would occur if an insider with access to these crown jewels stole patents, product designs, or marketing strategies and sold them to a competitor?

Intellectual property theft is incredibly disastrous, whether it’s R&D efforts to develop a new product or, in the arts field, the robbery of songs, lyrics, drawings, scripts, or conceptual designs. The intellectual property could be shared with a rival company, or an aggrieved employee could depart and create their organization using the intellectual property.

In other scenarios, the new product is patented by someone else, and the original organization cannot legally take back the patent. The theft happens due to insecure access to the intellectual property data, which could be avoided with strong security policies.

Market Value Reduction

Insider threats can cause a data breach, sensitive data leakage, production loss, and reputation damage to an organization. As a result, an investor’s image of the organization is negatively affected. So, one can imagine financial fraud happening because of access to privileged accounts.

A case of insider threat also implies that the organization is not secure enough because sensitive data can be leaked or the organization’s employees are untrustworthy. In many cases, the insider threat incident makes news headlines. The dominoes of reputational damage topple, and all of this plummets an organization’s share market stock price to low levels.

Proper steps should be taken from day one of operations to prevent market value reduction. Preventing a cyber-attack by an insider threat should be the first priority of the executive team and throughout the organization.

How to Recover After an Insider Threat Incident

You’ve had an insider threat incident, so you must pick up the pieces. What do you do? The potential consequences of insider threats highlight the importance of a robust security posture beyond mere firewalls and antivirus software. You must set up preventive measures and a comprehensive insider risk management plan.

Here are some steps you can take to recover:

Implement User Activity Monitoring Software

While privacy concerns should be addressed, user activity monitoring tools can play a vital role in detecting unusual activity. This software can monitor user actions, file access attempts, and data transfers, alerting security teams to potential breaches. However, it is important to ensure this monitoring is conducted ethically and transparently with employee knowledge.

User activity monitoring software must be impartial, but it is vital to a dedicated insider threat management system. Your organization needs this to deal with potential insider threats lurking within it.

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Train Employees on Data Privacy

Educating employees about their role in data security is crucial.  Employee education and having appropriate access for each job function is one aspect of limiting your cybersecurity risks.

For example, one effective technique is to send phishing emails to its users and focus training on those users who do not recognize the email as a phishing attempt. This helps reduce the number of employees who may become compromised insiders. It also protects critical systems from external attacks and internal threats. 

Leverage UEBA

User & Entity Behavior Analytics (UEBA) goes beyond regular security tools by analyzing user behavior patterns alongside other data points. You can identify anomalies that might signify an insider threat, such as unusual access times, attempts to download sensitive data, or sudden spikes in suspicious activity.

By leveraging UEBA, you can detect and respond to potential threats before they escalate into major incidents. It lets you view risk assessments of users, entities, departments, or specified groups based on regression analysis or uncover and reduce the occurrence of false positives in your incident management system.

How beneficial would it be to discover what happens when incident alerts are received? You can do this with in-depth investigation tools like session recordings and immutable logs. With UEBA, using analytics, you can also strengthen the security of system objects like email, web, application, data files, and access levels.

Set Up an Insider Threat Program

As part of a company’s robust security measures, a comprehensive insider threat program should encompass the following elements:

  • Threat Assessment: Regularly evaluate potential insider threats by identifying disgruntled employees, those experiencing financial stress, or people with high access privileges, for instance.
  • Detection and Reporting Procedures: Establish a culture of transparent communication, with clear and open channels for employees to report suspicious activity without fear of retaliation.
  • Incident Response Plan: Develop a detailed plan outlining steps to thoroughly contain the breach, mitigate damage, and investigate the incident. The plan should include roles and responsibilities for different teams, including HR, Security, IT, and the Executive team.
  • Post-Incident Review: Conduct a complete review to identify security policy and procedure weaknesses after an insider threat incident. Use this to strengthen your cyber defenses and prevent similar incidents in the future.


What consequences resulting from an insider threat include fines and layoffs?

The consequences resulting from an insider threat can include financial penalties and job layoffs. When insider breaches occur, organizations may face regulatory fines due to compromised data and may need to downsize their workforce to regain trust and mitigate further risks.

What is impact in insider threat?

The impact of an insider threat refers to the negative consequences that occur when an insider intentionally or unintentionally breaches security protocols. This can lead to financial losses, damage to reputation, compromised sensitive information, and the need for organizational restructuring.

What are the effects of malicious insiders?

Malicious insiders can have severe effects, including unauthorized access to sensitive data, financial loss, compromised system integrity, and damage to the organization’s reputation. To mitigate these risks, companies must establish robust security measures and implement an effective insider threat program.

What are the financial impacts of insider threats?

The financial impacts of insider threats can be significant, including financial losses from stolen or compromised data, legal fees, and potential regulatory fines. Additionally, organizations may incur costs for investigating and resolving the incident, implementing stricter security measures, and rebuilding stakeholder trust.

Which insider threats carry the most risk?

The most risky insider threats include malicious insiders who intentionally sabotage systems, steal sensitive information, or engage in fraudulent activities. These threats can have severe financial impacts on organizations, including financial losses, regulatory fines, and the need for costly security measures to prevent future incidents.


Implementing these strategies can equip you to recover from an insider threat incident and significantly reduce the likelihood of future attacks. A proactive approach to security is vital in today’s ever-evolving threat landscape. Enterprises large and small need everyone in the organization to be involved. By prioritizing data privacy, user education, and advanced security tools, you can build a more resilient organization, even in the face of an insider threat.