How Commercial Cyber Insurance Protects the Manufacturing Industry

As the manufacturing industry becomes more digitized, so does its exposure to cyber threats. In 2023, cyber criminals zeroed in on this sector, resulting in a record spike in cyber extortion incidents. A 2024 report by Orange Cyberdefense identified manufacturing as the most targeted sector, accounting for 20% of all cyber extortion campaigns—a 42% increase compared to 2022 figures, and 17% more than the next most affected sector. This trend highlights the urgent need for security measures beyond conventional cyber security practices. Commercial Cyber Insurance is an essential defense against the growing cyber threats to the manufacturing industry.

The Manufacturing Industry: A Prime Target for Cyber Attacks

So, why has there been a surge in manufacturing cyber attacks? This uptick is closely linked to the industry’s push toward integrating digital technologies to boost efficiency and drive innovation. While this advancement propels the manufacturing sector forward, it simultaneously opens the door to a wide range of cyber risks. From ransomware that holds data hostage to phishing scams that dupe employees into compromising security, the risks are vast and varied.

However, this vulnerability is more than mere technical oversight; it’s amplified by the sector’s crucial economic role, attracting cyber criminals like a magnet. The urgency to understand and address these unique challenges has never been more critical, as the industry seeks to strengthen its defenses against ever-evolving cyber threats.

Here’s a list of some common reasons behind the rise in cyber threats to the manufacturing industry.

  • Industrial Control System (ICS) Risks: Critical for managing production processes, ICS can be exploited, leading to severe disruptions.
  • Data-Driven Systems: The extensive use of data for operational efficiency makes manufacturers a target for cyber criminals aiming to steal or compromise data.
  • Supply Chain Attacks: Cyber criminals target vulnerabilities in the supply chain to gain access to manufacturers’ networks.
  • Outdated Operational Technology: Many manufacturers still use older technology that lacks modern security features, making them easy targets.
  • Increased Internet Connectivity: As manufacturers connect more devices and systems online, they increase their exposure to cyber threats.
  • Ransom Payouts: Manufacturers frequently meet ransom demands when attacked because even small incursions significantly affect customers, breach service level agreements, or disrupt the economy.

Understanding these issues is critical for manufacturers to implement more robust security measures and protect their operations, financial health, and reputation.

Limitations of Cyber Security in Manufacturing

Florida gas station runs out of fuel due to Colonial Pipeline cyber attack.

While cyber security is vital for protecting the manufacturing sector, it has limitations. Despite the best efforts to implement comprehensive security measures, the evolving nature of cyber threats means preventing all potential breaches is impossible. Cyber criminals continually adapt, finding new ways to bypass security measures.

Take the Colonial Pipeline attack in 2021, a stark reminder of the sector’s digital vulnerability. The DarkSide hacker group breached more than 5,500 miles of pipeline, threatening the airline industry’s fuel supply. Concerns over potential gas shortages also triggered panic-buying, resulting in long queues at gas stations across several states and a surge in average gas prices. To resolve the crisis, Colonial Pipeline paid the hackers 75 bitcoin ($4.4 million) to secure a decryption key that allowed its IT team to restore control over its systems.

This incident highlights a sobering truth: The effects of manufacturing cyber attacks can go beyond stopping production or disrupting supply chains. They can deeply undermine customer trust, affect millions, and cause chaos in large segments of the economy.

Cyber Insurance Offers Protection When Cyber Security Falls Short

Manufacturers must deal with numerous digital processes that manufacturer insurance and cyber security can’t fully protect. However, Cyber Insurance for manufacturers covers the core of digital operations in the manufacturing sector. More than just insurance, it’s a crucial tool in defending against cyber threats, offering protection where traditional policies might fall short.

Cyber Insurance offers key advantages:

  • Data Breach Response: Covers the costs of managing a data breach, including customer notification and support services.
  • Business Interruption Losses: Compensates for the revenue lost during downtime caused by cyber attacks.
  • Legal Fees: Provides coverage for legal expenses arising from the need to defend against lawsuits or regulatory actions due to breaches.

Cyber Insurance complements cyber security by offering financial protection and helping manufacturers recover from the costs of cyber attacks.

ProWriters Offers Comprehensive Cyber Insurance for Manufacturers

A smiling ProWriters agent is busy working at his desk.If you’re a broker who needs comprehensive Cyber Insurance for the manufacturing sector, turn to ProWriters. Our policies stand out with customizable coverage options, meticulously designed to mitigate industry-specific risks. Leveraging deep insights into the manufacturing industry’s unique challenges, ProWriters crafts solutions beyond standard protections.

Empower your clients with the security they deserve. Contact ProWriters to ask about our expertly designed policies or learn about cyber threats to the manufacturing industry from Cyber U. Plus, get your FREE, downloadable eBook, “An Industry at Risk: Why Cyber Security for Manufacturing Environments Isn’t Enough to Protect Your Clients.”