Manufacturers and engineering businesses are vulnerable to cyber-attacks in several ways. Cyber insurance is therefore a must to keep them running in the worst-case scenario.
There is a number of cyber liabilities that are not covered by commercial general liability policies for manufacturing businesses. So, when a cyber-attack happens to these businesses, who’s is liable for the costs associated with the defence, forensic investigations, data monitoring, and systems and hardware replacements?
Traditionally, in an event that a company suffered damage for one reason or another, the insurance carriers bore the brunt. But this isn’t the case for cyber events. Most manufacturing entities rely on their general liability policy to provide that coverage, but they don’t. Cyber insurance is excluded from general insurance, and many manufacturers are unaware of this fact. This can cost them in the long-term.
ICTs and connectivity are crucial for manufacturers, and therefore, cyber insurance has become a vital component of their security and risk management strategies.
The potential consequences of a breach are large, ranging from financial losses to theft of intellectual property to loss of reputation. Being aware of the potential dangers faced by your business is key to managing risk and getting adequate insurance coverage.
Threats abound the factory
Manufacturers face several threats. Because they are linked remotely to a wide variety of third-party partners and suppliers, as well as staff, this widens the attack surface for any interested threat actor.
Loss of intellectual property can be catastrophic to a business. Organisations are responsible for protecting their clients, employees and partners’ sensitive information. Then there’s third party damages, which could include inadvertently infecting a supplier with malware, or suffering a breach which exposes a third party’s private information.
There’s also business interruption to think of. Many organisations are covered in the event of a natural disaster such as a flood or earthquake but haven’t considered the ramifications should servers be damaged attackers, and the business taken down for a few days.
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Traditional insurance doesn’t offer coverage for loss of use of your systems due to data breach, which can shut the business down and cost it revenue and customers.
Manufacturers should also consider the menace of ransomware. This is a growing threat, in which attackers gain control of a company’s systems and data, demanding a ransom payment in order to release the files. This can hamper their ability to conduct their usual business, resulting in damaging financial losses.
Cover the necessities
When looking for a cyber insurance policy, stick to the basics, and have a good grasp of where coverage is needed most.
There are a range of providers offering various products and coverage, so read the fine print thoroughly. It is hugely important to determine the appropriate limits of liability, ensuring they are line with the total potential liability exposure in the event of a security incident.
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Make sure this includes third parties. There’s a good chance that at least some of your company’s information is either processed or stored by a third-party vendor, therefore it is crucial that any cyber insurance policy covers claims arising from breaches resulting from your data management partners.