Risk & Business Magazine Sterling Insurance Fall 2017 | Page 27

CYBER COVERAGE
BY: BRANDON HORROCKS
STERLING INSURANCE
T
The Value Of Cyber Coverage
For Manufacturing
he world, like it or not,
is becoming more and
more connected every day.
With an increasing need
for products and services,
many of which will end up halfway
around the world, it is understandable
that manufacturing facilities have a
need to constantly stay on their toes
when it comes to technology. This
means keeping equipment connected,
networked, and up-to-date. Automation
and the increasing adoption of novel
efficiency and productivity methods
are being utilized to help improve
margins and bring down overhead.
The unfortunate side effect of that
interconnectivity is that operations
can be derailed much more easily than
ever before, which could result in
huge financial losses for companies.
Protecting business income should be a
key strategy.
The manufacturing process typically has
three key points where a cyber-attack
could disrupt operations:
• Management Workflow – What
would happen if the management
workflow were to be disrupted?
• Manufacturing – The control
systems managing the
manufacturing process
•
Logistics – Vendor-driven systems
for handling distribution processes
and deliveries
With so many systems working together,
and the necessity of streamlining and
efficiency in modern manufacturing
processes, it wouldn’t take much to
derail an entire operation and shut a
plant down. So if you were looking at
a cyber policy to alleviate some of the
potential risk that your manufacturing
business may face, what key elements
would be included?
• Third-Party Liability and
Regulatory Coverage – A majority of
claims are likely to stem from third
parties who may have been affected
by a cyber breach.
• Crisis Response – Helps to cover
losses due to business interruption
resulting from the attack
• Hardware and Software Restoration
– Replaces hardware affected by
the event and provides funding
for overtime or contract staff who
can repair or restore lost data or
software
• Broad Triggers – A cyber event can
take place not only due to malicious
attacks on the part of hackers but
also due to mistakes in internal
systems, such as programming
errors. With broad triggers, you
can extend that traditional attack
coverage to include management
mistakes and even vendors.
Efficiently writing a policy, however,
comes down to the amount of key
information you can provide to your
insurance professionals. They need to
know what sorts of control systems
you use; any supply chain details, third
party trade secrets, and confidential
information you may hold; and financial
information about your facility
(specifically, how it might be affected in
the event of a shutdown). Unfortunately,
not all cyber policies are created
equally, and the vast majority of cyber
policies are not designed to address
manufacturing risks. +
Brandon Horrocks joined Sterling
Insurance Group in 2013 and brought
with him 20 years of knowledge and in
experience in the Commercial & Benefits
arenas. Brandon makes your business
his business and is well versed in helping
his clients reduce their risk & liability
during the Merger & Acquisition process.
Contact Brandon at bhorrocks@
sterlingagency.com or [phone].
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