In the wake of major data breaches at Target and Anthem, cyber insurance has become a hot topic in the business world. Many companies are now wondering if they need to purchase cyber insurance to protect themselves from the financial fallout of a data breach. While no company is completely immune to the risk of a data breach, manufacturing companies are particularly vulnerable to attacks due to the fact that they often collect and store large amounts of sensitive customer data.
What is Cyber Insurance?
Cyber insurance is a type of insurance that helps cover the costs associated with data breaches, cyber attacks, and other types of computer-related crimes. If your company suffers a data breach, cyber insurance can help cover the costs of notifying affected customers, providing credit monitoring services, and hiring a public relations firm to manage crisis communications.
Why Do Manufacturing Companies Need Cyber Insurance?
Manufacturing companies are at a higher risk of suffering a data breach than most other types of businesses for several reasons. First, manufacturing companies often collect and store large amounts of sensitive customer data, such as credit card information and social security numbers. Additionally, many manufacturing companies use outdated software and computers, which can make them more vulnerable to attack. Finally, manufacturing companies often have complex supply chains that span multiple countries, making it difficult to secure all points in the chain.
What Does Cyber Insurance Cover?
Cyber insurance policies can vary depending on the insurer, but most policies will cover some or all of the following:
First-party expenses, such as notification costs, credit monitoring services, and crisis management fees;
Third-party expenses, such as legal fees resulting from lawsuits filed by customers or shareholders;
Privacy expenses, such as regulatory fines and penalties;
Property expenses, such as lost income or extra expenses incurred to restore damaged systems;
IT expenses, such as forensic investigation costs and IT consultants fees.
Not all policies will cover all of these expenses, so it's important to read the fine print carefully before purchasing a policy.
Due to the increased risk of data breaches, manufacturing companies should seriously consider purchasing cyber insurance. Cyber insurance can help cover the costs associated with data breaches, cyber attacks, and other computer-related crimes. When shopping for a policy, be sure to read the fine print carefully in order to understand what is and is not covered by the policy.