"update" means it will check Sophos' servers for software, engine and detection updates. Detection updates happen roughly 6 times in a 24 hour period, with more or less depending on current malware trends. Engine updates happen once per month. Software updates happen roughly every 6 months, but more often when there's a bugfix or security update that needs to be released.
Sophos Antivirus has two main parts: the application itself that is used to configure the software and run manual scans, and the background software that continually monitors your local drives and installs updates. If you have a black shield on your menu bar (near the volume and WiFi icons), updating and on-access scanning is likely enabled, unless you've manually configured it otherwise via the settings.
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Andrew
