Imagine discovering that a cyberattack has rendered your company’s servers, point-of-sale terminals and critical equipment permanently unusable  — not stolen or physically damaged, but instead, inoperable and effectively useless. This scenario represents one of the most devastating, yet often overlooked, cyber threats facing businesses today: bricking attacks.

Most business leaders understand how cyberattacks can disrupt operations or expose sensitive data. Fewer understand that some attacks can destroy hardware on a fundamental level by corrupting the underlying software, a risk that often lies outside the coverage of traditional cyber liability or property insurance policies.

What Bricking Attacks Are and Their Impact

A bricking attack is a particularly destructive type of cyberattack that corrupts essential firmware or operating systems, rendering hardware completely inoperable. The term “bricking” derives from the fact that affected devices become as useful as a brick; they retain their physical form but lose all functionality. Bricking corrupts essential software at the lowest levels of device operation, preventing computers and other electronic equipment from even starting up or performing basic functions.

This threat differs from more familiar cyber risks like data theft or ransomware. Those incidents focus on unauthorized network access, data encryption or theft, while a bricking attack aims to destroy a device’s ability to function at all.

Bricking attacks are intended to create a permanent, unrecoverable loss for the business. Once a device’s core firmware has been corrupted, recovery may be difficult or impossible, and attempts to reinstall software, roll back firmware or restore systems often fail.

The consequences of such an attack can extend well beyond hardware replacement. When mission-critical devices, such as servers, point-of-sale terminals, medical equipment or manufacturing control systems, fail, entire operations may come to a halt. Production lines may shut down, retail stores may be unable to process transactions and health care providers may lose access to essential systems. The ripple effects of a bricking attack can include lost revenue, damaged customer trust and compliance challenges.

Does Standard Cyber Insurance Cover Bricking?

Bricking attacks are typically not covered by a standard cyber insurance policy.

Traditional cyber insurance most commonly covers data breaches, ransomware, business interruption and liability. Property insurance, on the other hand, covers physical damage to buildings or equipment. But neither is designed to handle damage that’s caused by malicious firmware corruption.

Because a bricking event destroys devices without visible physical damage, it usually does not trigger standard cyber or property insurance coverage. As a result, many organizations discover too late that their policies do not include coverage for this specific risk, leaving them on the hook for all costs related to the bricking attack.

How Bricking Coverage Works in Cyber Insurance

Coverage for bricking is generally offered as an endorsement or add-on to a cyber liability policy. This enhancement is designed to cover financial losses if devices become permanently inoperable due to malicious software corruption, rather than physical damage. Because this coverage is specialized, it may require additional premiums and negotiations.

When properly structured, bricking coverage may reimburse replacement costs for servers, laptops, point-of-sale terminals and other critical hardware. It may also cover related expenses, such as installation of replacement devices, labor to reconfigure systems and disposal of damaged equipment. In some cases, bricking coverage may even help with technical assessment costs in order to confirm the bricking event and document that restoration was impossible.

However, coverage generally applies only when devices are confirmed to be permanently inoperable and cannot be restored through software repair, firmware reinstallation or other remediation. Insurance carriers often require thorough documentation, including a technical report confirming firmware corruption, before a claim can be filed.

Industries Most Vulnerable to Bricking Attacks

Sectors that rely heavily on specialized hardware are particularly vulnerable, including:

• Health care providers: Sophisticated medical devices and electronic health record systems rely on embedded software. A bricking attack could disrupt patient care or data access that is essential for the daily operation of medical offices, and health care organizations are prime targets for cyberattacks.
• Financial institutions: ATMs, transaction processing systems, trading platforms and security hardware often rely on firmware that could be compromised in a cyberattack.
• Manufacturers: Production lines that utilize industrial control systems, automation equipment or computerized monitoring systems may face severe downtime and expensive replacements.
• Retail businesses: Point-of-sale devices, payment terminals and inventory management systems are common targets when many endpoints share similar configurations.
• Technology firms: Companies developing, manufacturing or configuring hardware and Internet of Things (IoT) devices could face both direct losses and liability if their equipment becomes a target.

Common Coverage Limitations and Exclusions

While policy terms will vary, bricking coverage often includes several restrictions, the most common of which include:

• Devices must be proven to be permanently inoperable due to malicious activity — not wear and tear, a manufacturing flaw or a software bug.
• Policies may include sub-limits by device type or cap total coverage for a single incident. For example, a policy might provide $100,000 in total bricking coverage but limit claims for individual devices to $25,000 or restrict coverage for certain types of equipment. High-value equipment may exceed per-device caps, which could leave organizations to cover the excess costs.
• Waiting periods may apply. Some policies do not cover bricking events that occur shortly after policy inception. Others may require a waiting period between the incident and claim eligibility.
• Some policies only trigger coverage when multiple devices are affected.

Because of these factors, it’s essential for businesses to read policy language carefully, understand applicable exclusions and secure policy limits that reflect their exposures. Review your policies with your insurance broker to help ensure that you have adequate coverage.

How Higginbotham Can Help

At Higginbotham, we recognize that cyber threats evolve quickly, and policies that seemed adequate a few years ago may no longer address today’s risks. We work closely with businesses to understand their operations, assess their exposure to risks and secure appropriate insurance coverage.

If you are uncertain about your current coverage or simply want to make sure your organization is protected against the full range of cyber threats, connect with one of Higginbotham’s business insurance specialists today.