The Ultimate Guide to Cyber Insurance for Manufactures

In recent times, the manufacturing sector has emerged as a prime target for cybercriminals across the globe. In 2022, the United States witnessed around 250 data breach incidents in this industry, affecting nearly 23.9 million users. Cyber attackers often demand ransom in cryptocurrencies for the stolen data or sell it on the dark web.

With the global average cost per industrial data breach reaching approximately $4.47 million in 2022, it is crucial for manufacturers to safeguard themselves. 

Manufacturers' cyber insurance policies are typically designed to cover the costs associated with data breaches. This includes paying for identity theft protection, cyber security consultants, and legal fees related to breach notifications. Typically, this coverage also covers the loss of digital assets, including revenue due to downtime or lost productivity caused by a cyberattack. Other aspects may include reputational harm and financial losses resulting from an attack.

We Have the Best Cyber Insurance Policies for Manufacturers

Brighton Financial and Insurance Services (BFIS) offers comprehensive cyber insurance policies for manufacturers. Our team of experienced professionals understands the nuances associated with this industry, allowing us to tailor our solutions specifically to meet your needs. We accommodate both large and small manufacturing entities, providing coverage plans that are customized for each individual business.

Since we are an independent manufacturer's cyber insurance agency, we have the ability to compare and contrast various business insurance policies from different vendors. This allows us to find the policy that best fits your needs, at a price that is competitive in the market. We also offer options for deductibles, so you can decide how much risk you are comfortable taking on yourself versus leaving it up to the insurance provider.

When you choose BFIS as your cyber insurance provider, you can rest assured that your business is protected. Our team will guide you through the process and provide resources to help you navigate this critical aspect of cybersecurity. Contact us today to learn more about our manufacturer’s cyber insurance policies. We look forward to working with you.

Common Cyber Threats to US Manufacturers

Manufacturing firms face a variety of cyber threats, ranging from malicious actors to accidental data leaks. Some of the most common threats that US manufacturers encounter include:

1. Ransomware attacks: Cybercriminals use ransomware to encrypt a company's data, rendering it inaccessible until a ransom is paid. These attacks can disrupt operations, lead to financial losses, and damage a company's reputation.
2. Phishing and social engineering: Attackers use deceptive tactics to trick employees into divulging sensitive information or clicking on malicious links, which can result in unauthorized access to company systems and data breaches.
3. Insider threats: Disgruntled or negligent employees can pose significant risks to an organization's cybersecurity, intentionally or unintentionally causing data leaks or system vulnerabilities.
4. Advanced Persistent Threats (APTs): APTs are sophisticated, long-term cyber-espionage campaigns that infiltrate a company's network to steal sensitive data or disrupt operations. Manufacturing firms with valuable intellectual property or trade secrets are particularly susceptible to these threats.
5. Supply chain attacks: Cybercriminals can target vulnerabilities in a manufacturer's supply chain, compromising third-party vendors' systems to gain access to the manufacturer's network and data.
6. Industrial Control System (ICS) attacks: ICS attacks specifically target the critical systems that control manufacturing processes, potentially causing physical damage to equipment, production downtime, and even safety hazards.
7. Distributed Denial of Service (DDoS) attacks: DDoS attacks overwhelm a company's network resources, causing disruptions to online services and potentially leading to costly downtime.
8. Malware: Malware infections can cause data loss, system vulnerabilities, and the spread of malicious code across corporate networks. These threats can also be used by attackers to gain access to a company's systems for further exploitation.

By understanding the cyber threats facing their businesses, manufacturers can take proactive measures to protect themselves from attacks. This includes implementing strong password policies, enforcing effective network security protocols, and regularly patching and updating software to prevent malicious code from entering the system. Additionally, manufacturers should educate their staff on cyber security best practices to help minimize the risk of insider threats. Finally, companies should consider investing in advanced cybersecurity solutions such as firewalls, malware scanners, and intrusion detection systems to monitor for malicious activity and protect their networks.

Understanding Manufacturer's Cyber Security Insurance

Cybersecurity insurance is a crucial component for manufacturers seeking to protect their businesses from the financial consequences of cyber threats. This specialized insurance coverage is designed to mitigate the risks associated with data breaches, cyber-attacks, and other cyber-related incidents. Understanding the key aspects of cyber insurance for manufacturers can help you make informed decisions about the right coverage for your business.

Who Needs Manufacturer Cyber Insurance? 

While cyber insurance is essential for all manufacturers, certain manufacturing subsectors or groups may be at higher risk or have more significant cybersecurity concerns. The following 15 groups should strongly consider obtaining manufacturer cyber insurance:

• Automotive manufacturers
• Aerospace and defense manufacturers
• Chemical manufacturers
• Pharmaceutical and medical device manufacturers
• Electronics and semiconductor manufacturers
• Food and beverage manufacturers
• Textile and apparel manufacturers
• Industrial machinery and equipment manufacturers
• Consumer goods manufacturers (toys, household items, etc.)
• Metal fabrication and processing manufacturers
• Plastics and rubber product manufacturers
• Paper and packaging manufacturers
• Energy and utilities equipment manufacturers
• Building materials and construction product manufacturers
• Agricultural machinery and equipment manufacturers

Each of these groups faces unique risks and challenges related to cybersecurity, including protecting sensitive data, maintaining regulatory compliance, and safeguarding critical infrastructure. Investing in cyber insurance can help mitigate the financial consequences of cyber threats and provide valuable resources for managing and recovering from cyber incidents.

Manufacturers' Insurance Coverage Types

Manufacturers' cyber insurance policies typically include both first-party and third-party coverages to provide comprehensive protection against various cyber threats. 

First-party coverage addresses the direct costs incurred by the manufacturer as a result of a cyber incident. This may include:

1. Data breach response: Expenses related to investigating and resolving a data breach, such as hiring forensic experts, notifying affected parties, and providing credit monitoring services.
2. Business interruption: Financial losses resulting from disruptions to business operations due to a cyber event, such as downtime, lost revenue, and increased operating expenses.
3. Data restoration: Costs associated with recovering or restoring lost or damaged data, including the hiring of IT professionals and the purchase of new hardware or software.
4. Cyber extortion: Ransom payments made to cybercriminals in response to ransomware attacks or other extortion demands, as well as the costs of negotiating and managing such incidents.
5. Public relations and crisis management: Expenses for hiring public relations consultants or implementing communication strategies to protect the company's reputation following a cyber incident.

Third-party coverage protects manufacturers against cyber liabilities arising from claims made by clients, partners, or other affected parties due to a cyber event impacting the manufacturer. This may include:

1. Legal defense: Costs associated with defending the manufacturer in lawsuits or regulatory actions resulting from a cyber incident, such as attorney fees, court costs, and settlement expenses.
2. Regulatory fines and penalties: Financial penalties imposed by regulatory authorities for non-compliance with data protection laws or industry-specific regulations following a cyber event.
3. Notification and credit monitoring: Expenses related to notifying affected third parties of a data breach and providing credit monitoring or identity theft protection services, as required by law or contractual obligations.
4. Network security and privacy liability: Covers claims arising from unauthorized access to or use of a third party's data held by the manufacturer, as well as damages resulting from failures in the manufacturer's network security.

When selecting a cyber insurance policy, manufacturers should consider both first-party and third-party coverages to ensure comprehensive protection against the financial consequences of cyber threats. Working closely with an insurance provider can help tailor coverage to meet the specific needs and risks associated with the manufacturing industry.

Risk Assessment

Before purchasing manufacturers cyber insurance, manufacturers should conduct a thorough risk assessment to identify potential vulnerabilities and the likelihood of cyber threats. This assessment can help determine the appropriate coverage limits and policy features necessary to protect the business effectively. Some factors to consider during a risk assessment include the type of industry, data sensitivity and storage practices, cyber security measures in place, and third-party services used.

Cyber Liability Insurance Customization for Manufacturers

Cyber insurance policies can be tailored to meet the unique needs of manufacturers, taking into account factors such as industry-specific regulations, the size of the company, and the nature of the data being processed. 

Incident Response and Support

Many cyber insurance policies include access to expert resources and support services in the event of a cyber incident. These may include legal counsel, forensic investigators, public relations specialists, and IT professionals who can assist in managing the situation and minimizing the impact on your business.

Some policies also provide access to resources and services that help prepare for and prevent cyber incidents, such as security audits, risk assessment tools, and employee training.

Manufacturers’ Cyber Crime Insurance Exclusions and Limitations 

It's essential to understand the exclusions and limitations of your cyber insurance policy. Some policies may exclude certain types of attacks or incidents, while others may have specific deductibles or waiting periods before coverage takes effect. Common exclusions or limitations include:

• Coverage for existing cyber risks or events at the time the policy was purchased.
• Acts or omissions by company management or employees.
• Intentional and malicious acts on behalf of the insured organization.
• Losses resulting from activities conducted in violation of law or regulations (such as GDPR).
• Claims involving intellectual property infringement or misuse of proprietary information.
• Damage resulting from the use of outdated systems and software.

It is important that you carefully review your policy to ensure that it meets the specific needs of your organization. Your insurance provider is a great resource for understanding what is and isn't covered by your policy.

Continuous Improvement

As cyber threats evolve, so should your cyber insurance coverage too. Regularly review and update your policy to ensure it remains relevant and effective in addressing the changing risk landscape. Additionally, implementing robust cybersecurity measures and employee training programs can help minimize the likelihood of a successful cyber-attack, complementing your insurance coverage and further safeguarding your business.

How Much Does Cyber Insurance for Manufactures Cost?

The cost of cyber insurance for manufacturers varies widely depending on the size and scope of your organization, the type of policy you purchase, and other factors such as your industry and the security measures you have in place. Generally speaking, however, most policies cost between $2,500 and $10,000 per year. Additionally, many insurers will offer discounts for businesses that have implemented strong cybersecurity measures.

Get a Manufacturers' Cyber Crime Insurance Quote

Let Brighton Financial and Insurance Services (BFIS) help you find the right cyber insurance policy for your organization. Our experienced team will work with you to understand your unique needs and identify the coverage that best fits your budgets and goals. Contact us today to request a quote. We look forward to helping you protect your business from cyber threats.