Insider Threats: What They Are and How to Prevent Them

When people think of cybersecurity, they usually imagine outside hackers trying to break in. But what if the biggest risk to your business comes from inside?

An insider threat is one of the most overlooked but dangerous risks facing organisations today. Unlike external attacks, insider incidents involve people who already have legitimate access to your systems, networks, or data. That access makes them harder to detect and potentially far more damaging.

In this article, we’ll explain what insider threats are, share examples of how they occur, explore why they are so dangerous, and outline practical strategies for reducing insider security risks.

What Is an Insider Threat?

An insider threat is a risk posed by someone with authorised access to your company’s systems or information who misuses it, intentionally or unintentionally. This person might be:

A current employee who mishandles sensitive data.
A former staff member whose access was never properly revoked.
A contractor, supplier, or business partner with system privileges.

Because these individuals already have legitimate access, traditional cybersecurity tools such as firewalls or intrusion detection systems may not catch them.

Common Insider Threat Examples

Insider risks can take many forms. Some of the most common include:

Malicious insiders: Employees who deliberately steal, leak, or destroy data for personal gain or revenge. For example, a departing staff member downloads customer data before leaving the company.
Negligent insiders: Staff who unintentionally cause damage by falling for phishing scams, misconfiguring systems, or using weak passwords.
Compromised insiders: Legitimate users whose accounts are hijacked by cybercriminals, often through stolen credentials or malware.

Real-world reports show that these internal risks are responsible for a significant percentage of data breaches globally — and the costs are rising each year.

Why Insider Threats Are So Dangerous

Unlike external attacks, internal risks bypass many of the barriers businesses have in place. A few reasons these threats are particularly damaging:

Trust factor: Insiders often hold privileged access, so their activity may not raise alarms until it’s too late.
Harder detection: Malicious behaviour may look like normal work activity.
High potential damage: A single incident can result in major data loss, compliance breaches, or reputational harm.
Broad impact: Insider-related incidents often lead to downtime, legal consequences, and loss of customer confidence.

For New Zealand organisations, the stakes are higher since the Privacy Act 2020 requires businesses to notify the Office of the Privacy Commissioner (OPC) of serious breaches.

Best Practices for Preventing Insider Attacks

Reducing insider risk requires a layered approach that combines technology, processes, and people. Below are seven best practices every business should consider.

1. Conduct regular risk assessments

Identify your most critical assets — from customer records to intellectual property — and assess how vulnerable they are to insider misuse. Use these insights to shape your risk management policies.

2. Strengthen identity authentication

Use two-factor (2FA) or multifactor authentication (MFA) to verify user identity before granting access. This extra step reduces the chance of stolen credentials being used to access sensitive systems.

3. Manage access and permissions carefully

Apply the principle of least privilege. Employees should only have the access they need to perform their roles. Review and update permissions regularly, especially when staff change positions or leave the business.

4. Provide ongoing training and awareness

Technology alone can’t solve insider risks. Staff need to understand security policies, safe practices, and the consequences of poor behaviour. Insider risk awareness training should be ongoing, not just a one-time exercise.

5. Establish baseline behaviours

Machine learning and automation tools can help establish what “normal” looks like in your organisation. Any deviation from baseline activity — such as an employee downloading large volumes of data outside work hours — should trigger an alert.

6. Implement continuous monitoring

Proactive monitoring of networks, systems, and user activity can help spot suspicious behaviour before it escalates. While this requires investment, it provides valuable visibility into potential risks.

7. Prepare strong data backup and recovery solutions

Even with prevention in place, incidents may still occur. Efficient backup and recovery solutions reduce downtime and help your business bounce back quickly if critical data is lost or compromised.

Building an Insider Risk Management Program

The most resilient organisations don’t just adopt individual controls — they implement a broader insider risk management program. This includes:

Written policies on acceptable use of data.
A structured incident response plan for internal threats.
Regular audits of user accounts and permissions.
Collaboration between IT, HR, and management to handle insider risks holistically.

Insider Threats in New Zealand

While insider threats are a global problem, New Zealand organisations face unique challenges. For example:

Privacy Act 2020: Requires reporting of serious data breaches. Insider incidents often qualify as notifiable events.
Industry-specific compliance: Sectors like finance and healthcare face additional requirements (e.g., PCI DSS, ISO 27001).
Resource constraints: Many SMEs lack in-house cybersecurity expertise, making them more vulnerable to employee-driven risks.

This makes proactive prevention and trusted IT partnerships essential.

Taking Action Against Insider Risks

The first step in reducing insider threats is recognising that they can happen in any business, regardless of size or sector. The next step is implementing practical controls and partnering with experts to strengthen your defences.

By combining security tools, clear policies, and employee awareness, you can dramatically reduce the chances of an insider-caused incident.

Partner With Us to Protect Your Business

No business can completely eliminate insider risks, but you can minimise them. With the right strategy, you’ll not only protect sensitive data but also comply with regulations and maintain customer trust.

Contact us today to learn how we can help your organisation prevent insider threats and strengthen overall cybersecurity resilience and or connect with us on LinkedIn to stay updated with more insights.

Frequently Asked Questions About Insider Threats

1. What is an insider threat in cybersecurity?
It’s a risk created by someone with legitimate access — such as an employee, contractor, or partner — who misuses that access, intentionally or unintentionally.

2. What are examples of insider threats?
Examples include malicious employees stealing data, negligent staff exposing files through mistakes, or compromised accounts hijacked by cybercriminals.

3. How can insider risks be prevented?
Prevention includes strong authentication (MFA), least-privilege access, continuous monitoring, training, and data backup and recovery plans.

4. Why are insider threats difficult to detect?
Because insiders already have legitimate access, their activity may appear normal. Behaviour monitoring and anomaly detection tools help identify risks earlier.

5. Do small businesses need to worry about insider threats?
Yes. SMEs are often more vulnerable due to limited resources and weaker policies. Every organisation should take steps to manage insider risks.

6. What’s the difference between malicious and negligent insiders?
Malicious insiders act deliberately to cause harm or steal information. Negligent insiders cause harm through carelessness, mistakes, or lack of training.