Ransomware attacks are impacting organizations with complex systems and operations, particularly manufacturers, and comprehensive Cyber Risk Insurance is a critical protection for the ensuing business interruption losses.
Manufacturers have been slow to purchase cyber risk insurance, particularly SMBs (small and medium-sized businesses). A misperception that Cyber Risk Insurance only covers data breach, and therefore an organization without confidential information does not need the coverage, may be a factor. However, ransomware does not rely on confidential data, and manufacturers can be lucrative targets for cyber criminals. Organizations depending on sophisticated systems such as digitally controlled processes are prime targets, and a successful ransomware attack can generate substantial business interruption losses.
Industrial control systems in manufacturing, energy, chemical and other environments are coming under an increasing number of cyberattacks, as hacking groups of all kinds attempt to breach these networks. One expert estimates that 50% of industrial control system networks have been attacked.
A global manufacturer located in Norway, Norsk Hydro, suffered a significant ransomware attack in early in 2019 which disrupted its operations far more than anticipated. The company estimated the cost at approximately $40 million, and that estimate is likely to climb. The company has Cyber Risk Insurance.
A much smaller organization, a custom manufacturer of kitchen units, suffered an attack which shut down its sales and administrative services – resulting in a business interruption cost of $100,000. In this case, Cyber Risk Insurance paid the claim.
Cyber Risk Insurance is an essential coverage for businesses without confidential information, such as manufacturers, and SMBs are particularly vulnerable. Coverages vary widely, so a thorough review is essential to ensure that comprehensive coverage, with appropriate protections for ransomware attacks, is in place.
Tennant Risk Services, a division of Worldwide Facilities, is a specialty wholesale broker and underwriting manager delivering expertise, markets and exemplary services to our retail insurance agent clients in the placement of professional liability and specialty insurance (E&O, D&O, EPL, Cyber Risk, Specialty). We are experts in Cyber Risk Insurance and excel at hard to place accounts.