Cyber-crime insurance up among manufacturersPosted on
Manufacturers paid $36.9 million in premiums for cyber insurance last year, up 89 percent from 2015.
Factories are increasingly computerized, automated and digitally integrated with other parts of a company and keeping those networks secure is critical, according to the Wall Street Journal, citing data from Advisen Ltd., an insurance consulting firm.
If a cyber attack shuts down a factory, the manufacturer might not be covered by existing policies.
“It’s hard to think of an area of our business that is not touched by this, as business is only becoming more connected,” Eric Dobkin, director of insurance and risk management at drugmaker Merck & Co., told the paper in an email.
Regulators called out Abbott Laboratories, in part, for botching its response to a report that hackers could manipulate some of the company’s defibrillators and pacemakers. Abbott acquired the devices when it bought St. Jude Medical Inc.
The criticism, which came in a warning letter from the federal Food and Drug Administration, puts another spotlight on the fusillade of cyber dangers that manufacturers face.
For years, consumer-facing businesses — retailers, financial-service providers and hospitals — overwhelmingly purchased cyber insurance. Mostly this was to protect against customer data theft.
The St. Jude situation helps explain why manufacturers are making sure they’re covered.
“Nobody should be able to look at themselves in the mirror and say ‘I’m not exposed to this,’ ” Robert Wice, leader for technology, media and business services of Beazley PLC in the United States, told the newspaper. “It should be top of mind.”
‘‘There is not a risk manager out there who wants to walk into a board meeting to explain why he didn’t think to get a cyberinsurance quote, especially since it’s so cheap,” said Michael Blake at Alliant Insurance Services.