Global supply chains have largely recovered from the shipping and stocking disruptions of the COVID-19 pandemic. But 2024 saw another threat playing havoc with these vital networks: supply chain attacks.
High-profile incidents in healthcare, automobile retail, and even the cyber security industry itself cast a harsh spotlight on how vulnerable dependencies and connections between businesses are in today’s economy.
We at ProWriters encourage you to review what we’re calling “the year of the supply chain attacks” with your clients. Doing so can help assess their risk management strategies and the adequacy of their Cyber Insurance coverage.
Supply Chain Cyber Attack Examples in Healthcare
On Feb. 21, a ransomware attack hit Change Healthcare, one of the world’s largest health payment processing companies. The attackers disrupted operations and stole up to 6TB of millions of patients’ protected health information (PHI) and other sensitive data.
The incident is “the most disruptive cyber attack on U.S. critical infrastructure to date.” But it could have been prevented had Change Healthcare been using multifactor authentication (MFA) on the targeted remote server.
The mistake is a costly one. The company paid a $22 million ransom to retrieve data stolen in the attack. It lost $1.1 billion in earnings in the second quarter and an estimated $2.3 billion for the year.
A ransomware group also hit Ascension, one of the biggest nonprofit healthcare systems in the U.S., operating 142 hospitals and 40 senior facilities. On May 8, the attack shut providers out of the system’s electronic health records (EHR).
Hospitals across three states experienced “delayed or lost lab results, medication errors, and an absence of routine safety checks via technology to prevent potentially fatal mistakes,” as NPR reported. The attack may also have exposed some patients’ PHI.
The Ascension ransomware attack began when an employee mistakenly downloaded a malicious file. The incident underscores human error as one of the biggest threats to cyber security. Research from Stanford University and security firm Tessian points to employee mistakes as the cause of 88% of data breaches. At the same time, as cyber security consultant John Bambenek told SC Media, “many controls … are commonly available to prevent a mouse click from downing an entire healthcare conglomerate.”
Ascension suffered dangerous disruptions to patient care and significant financial losses. Its cash on hand dropped. Net days in accounts receivable increased. And the system reported a $1.8 billion operating margin loss.
CDK Ransomware Attack Hurts Automobile Dealers
Nearly 15,000 North American car dealerships rely on software from CDK Global to manage their businesses. On June 19, ransomware infected CDK’s servers. The malware targeted such personally identifiable information (PII) as customers’ Social Security numbers, bank account and telephone numbers, addresses, and credit card data.
The attack used double extortion tactics. The criminals encrypted and stole data, then threatened to release it to illegal markets unless CDK paid a $25 million in Bitcoin ransom.
CDK shut down its systems, forcing the dealerships that rely on them to follow suit. Many resorted to pen and paper to maintain operations, and they even drove auto records to DMV offices rather than transmit them digitally.
CDK did not fully restore services until the July 4th weekend. Experts said the CDK ransomware attack cost dealers more than $1 billion.
“Crowdstrike Attack” Gives Bad Actors Irresistible Openings
Crowdstrike is a cloud-based cyber security company whose Falcon endpoint detection and response (EDR) solution monitors for malware and other suspicious activity.
Initially, the “Crowdstrike cyber attack” in July wasn’t an attack. Rather, a faulty software update to millions of users’ Windows operating systems resulted in widespread IT outages. The incident disrupted airlines and airports, public transit, hospitals, emergency dispatch systems, financial services, retailers, and more.
Malicious actors, however, quickly exploited this incident and launched supply chain attacks. Some sent spear phishing emails, tricking users into installing malicious code masquerading as corrective updates and patches. Others posed as Crowdstrike staff or independent researchers in phone calls to gain access to users’ systems. Still others set up fraudulent websites so users searching for solutions might find them and give up secure login credentials.
The Crowdstrike outage “highlights the same [supply chain] vulnerabilities we saw during the SolarWinds attack in 2019,” the U.S. Government Accountability Office states. It will cost Fortune 500 companies $5.4 billion. And, as cloud security expert Ken Huang writes for CSA, it “reveals how a single point of failure in the complex web of supply chain services can trigger far-reaching consequences.”
ProWriters Helps You Keep Your Clients Prepared
No organization can entirely protect itself against a software supply chain attack. However, companies can and must adopt a proactive approach to supply chain risk management. They must exercise due diligence, continuously monitor third-party security practices, and implement stringent access controls.
They must also avail themselves of robust Cyber Insurance coverage.
Cyber Liability Insurance offers financial protection against costs associated with data breaches, including legal fees, regulatory fines, and notification expenses. Additionally, policies can include access to expert cyber incident response teams and cyber security consultants. Such assistance helps businesses manage the aftermath of an attack, restore affected systems, and prevent future vulnerabilities.
When you’re a registered ProWriters broker, you can use our Digital IQ Comparative Rate Platform to quickly research and quote Cyber Insurance coverage from the industry’s top carriers. You’re sure to find the policies your business clients need at competitive rates.
Register as a ProWriters broker today to better help your clients protect themselves in today’s increasingly interconnected world.
