Develop Your Risk Management Strategy: Manufacturing Cyber Insurance

Did you know that the manufacturing sector is the second-largest industry targeted by cyber criminals? Hackers know that manufacturers often use outdated software and do not invest in advanced network security and this makes them a very easy target. A study by Deloitte found that 40% of manufacturing firms have experienced a cyber-attack in the past year with 38% of them incurring more than $1 million in total damages.

Manufacturers are not only at risk of having their own information compromised, but also that of customers.

One of the biggest cyber concerns is Business Interruption as manufacturers become more automated/computerized, software reliant, and enabled by the “Internet of Things.” Some may think Business Interruption would be picked up by their property or liability coverage but it’s NOT. Imagine your operations being shut down simply because one of your employees clicked on a link or opened an email they shouldn’t have.

Examples of Manufacturing Cyber Risks

Some of the cyber concerns among manufacturers include: intellectual property theft, phishing, pharming, extortion, security breaches involving a third party, social engineering, and employees using their own mobile device for work.

When has the manufacturing industry been hit with cyber-attacks?

• Hackers caused a German steel mill’s blast furnace to overheat, leading to millions of dollars in property damage.
• WannaCry infection tore through unpatched Windows 7 machines, knocking out production for days and costing a company an estimated $250 million.
• Hackers locked down a manufacturer’s system at their busiest time of the year. The hacker demanded a ransom of bitcoin, and they were shut down for over 7 days.

The biggest problem I see day to day is that a lot of manufacturers just don’t understand the threat, or they rely too heavily on their “IT” service.  When I ask about specific exposures or vulnerability, they normally bring in the IT person and they say, “we’ve got it all covered,” but many don’t want to admit there may be a risk when it’s their job to protect against it.

Learn More About Manufacturing Cyber Risks

For more information about cyber issues and insurance for manufacturers please contact Aaron MacFarlane, team leader of Manutech Advantage, industry specialists helping manufacturers with risk management and business consultation.

Phone: 1-800-661-1518 Email: amacfarlane@danlawrie.com
LinkedIn: Lawrie Insurance Group – Manufacturing Specialty Group

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Ranked in the top 5% of independent brokerages in Canada, Lawrie Insurance Group is a privately owned and operated insurance brokerage with over 100 employees specializing in all areas of personal and corporate property/casualty insurance, employee benefits, financial services, and group retirement products.