Cyber crime threatens medical manufacturers

Manufacturers paid $36.9 million in premiums for Cyber Insurance in 2016, according to figures from Advisen Ltd, an insurance consulting firm reported in the Wall Street Journal, up a staggering 89% from the year before.

With 1 in 5 UK businesses falling victim to cyber crime between April 2016 and 2017, it’s not hard to see why there has been a sudden surge in manufacturer’s taking out Cyber Liability policies.

What are the potential impacts of a breach?

With cyber attacks on big businesses never far from the headlines, it is not hard to imagine how a data security breach could shut down a factory. Manufacturing environments are increasingly computerised, automated and digitally integrated with other parts of a company.

A hack or breach in any manufacturing business could easily threaten the security of the whole company; potentially stopping production and trading until the source is discovered, the damage limited and the incident investigated.

For pharmaceutical or medical manufacturers, a hack could be devastating.

In this highly specialised industry, malicious software or rival espionage could see a business losing sensitive data, patented property or intellectual property, as well as potentially damaging hugely expensive specialist equipment.

What’s more, ceasing production could cause supply chain issues for hospitals, clinics and healthcare authorities, ultimately impacting on public health.

Won’t my Business Interruption cover damage or losses?

A Business Interruption policy will usually stipulate the “interruptions” it covers – typically fire, flood and theft – as well as any exclusions. Computer equipment and specialist machinery may or may not be covered, depending on your policy.

However, standard Business Interruption insurance won’t cover a cyber attack if nothing is physically damaged – so lost or stolen data, bank details or money may be exposed.

Medical manufacturers should consider specialist Cyber Insurance. It can cover the a wide range of costs associated with cyber losses, including legal and PR costs, with a limit which reflects the value of the large amounts of data stored by pharmaceutical organisations.

Get in touch with Safeguard’s Life Science insurance specialists on 08456 888 284 for more information.