Cyber insurance for equipment dealers becomes increasingly critical as more and more transactions take place online. General consensus is that once you collect data, you own it and need to protect it, and you’re liable for damage that happens after a data breach. Cyber insurance protects equipment dealers and their customers. However, many equipment dealers don’t have cyber insurance or don’t carry enough insurance to properly protect their business.
Cyber insurance covers both first- and third-party sources of cyber threats. First party cyber threats are internal to the equipment dealers on their own network or systems. Third party cyber threats are from a client’s systems or networks.
Some clients have business interruption insurance, but it’s important to note that cyber breach or attack is not covered under business interruption insurance unless specific endorsement is present.
Cyber insurance also covers bricking. Bricking is when an electronic device becomes unusable due to a failed software or firmware update. The device may no longer function or start up at all if the update error causes sytem-level damage. In these cases where the device is no longer usable, it is effectively reduced to a paperweight, or “brick.” Cyber insurance protects against bricking damage due to software or firmware updates, making your business whole again.
Cyber insurance also covers extortion and ransomware. An example of extortion is when a hacker locks users out of a system and then requires payment to restore access to the company. Sometimes these payments are cash, and many times the payment is in cyber currency such as Bitcoin. Ransomware is a type of malware that threatens to perpetually block access to a person’s or company’s data or publish the information until a ransom is paid. Cyber insurance can cover ransom payments and professional aid to recover from these events, and may also cover loss of business. Oftentimes it is less costly for a company to pay a ransom than to fight back against cyber criminals, but each case should be reviewed.
Ransomware recently made national headlines with the Colonial Pipeline hack. According to this article from Reuters, a single password was stolen from Colonial, resulting in a multi-million dollar ransom paid to Russian cyber criminals. Most of the ransom, which was paid in Bitcoin, was later recovered by the U.S. Justice Department. Chief Executive of Colonial, Joseph Blount, said this particular password was not used in a two-factor identification system, which left the company vulnerable to cyber attack.
Equipment dealers, material handling companies and rental houses regularly collect personal information from their clients. This information needs protection to avoid an interruption to the business services. Not only can cyber breach be costly to the business in straight dollar terms, it can be costly to the ongoing relationship with the rental customers. Customers want to have peace of mind that the companies they deal with have adequate protections in place before entrusting them with sensitive information like credit cards or insurance information.
When a customer receives notification about a data breach, it impacts the level of trust they feel toward a brand or organization. This trust influences a customer’s engagement with and affinity for a brand. Infosys, a global tech firm, estimates the impact of data breach to brand value. For auto makers, the brand value risk is 8-9%.
A recent Forbes.com article titled “184 Years In: Ag Giant John Deere Awaits Its First Software Vulnerability” featured John Deere, a leading agricultural equipment manufacturer. Much of the ag equipment and heavy equipment in use today is software-driven and Internet connected. John Deere encourages third-party developers to write software that sits on top of application platforms like MyJohnDeere. Due to the increasingly connected nature of ag and heavy equipment, many manufacturers have ramped up focus on cyber security in an industry that has not received much attention for cyber breaches or attacks.
While it may seem like an unlikely event, it’s worth considering the implications to the US economy for cyber crime that targets our agricultural industry or construction. Let us help you build a plan that protects your business and equipment from similar such attacks.
The cost of cyber insurance is influenced by how many customer credit cards you handle, sales volume of your business, number of employees, and how much you handle other people’s information. Dollar limits also influence the cost of cyber insurance, and many policies have a $1 million limit on coverage. Because there are so many factors that go into the cost of cyber insurance policies, the best way to determine the cost is by obtaining a quote with a reputable insurance provider.
Cyber insurance is likely available with your current insurance agent. However, it’s critical that your agent is not only knowledgeable about cyber insurance, but also that he or she is an equipment industry expert. At Ricker and Associates, we are well-versed in cyber insurance and we also know the equipment industry better than just about anyone.
If you currently carry cyber insurance on your business insurance policy, have you updated your coverage recently to keep in step with trends in cyber crime? Are you feeling overwhelmed by coverage you don’t fully understand, or would you like to proactively take steps to protect your business before cyber crime impacts you and your customers? We can help.