Oops, We Didn’t Get Cyber Insurance Before Attack

If you are a client of ours you know that we always recommend that you have an appropriate level of cyber insurance in place. Just in case. Other forms of business insurance will not cover a cyber attack (some carriers do “bundle” cyber policies with other business policies and that is fine, but don’t assume that insurance like GCL (general commercial liability) will provide cyber coverage in case of an attack. It won’t in 99 percent of the situations).

Fast forward to today. Today we are learning that Jaguar did not have a cyber insurance policy in place before the attack. How it is possible that a company of that size “failed to finalise” a cyber insurance deal before the attack.

We are now into week 4 of production being shut down; dealers not having any new inventory; dealers not able to create order parts for repairs (if your car is broken, under warranty, who pays for alternate transportation, possibly for months?); dealers not able to transfer titles to buyers; suppliers having to shut down and lay off staff and likely some suppliers going out of business. All of which will get Jaguar Land Rover sued in, probably, every country they do business in.

And, at least from what we know today, Jaguar will be paying for the cost of all of that – repairs to their systems, defending themselves and settlements – out of their own pocket.

Likely this will cost many hundreds of millions of pounds sterling.

It is so bad that the government is trying to support Jaguar’s suppliers, who represent 200,000 jobs to stop many of them going out of business which would represent another challenge to Jaguar resuming operations.

One pretty crazy idea is for the government to buy parts from their suppliers and then sell them to Jaguar when they get their operations back running. In theory, this might only represent a loan from the government because they would get their money back eventually.

Because the auto industry, for years, has been buying parts “just-in-time”, many suppliers, especially the small ones, have already stopped production and laid off workers.

So here is the takeaway:

If you do not have cyber insurance today, unless you like writing big checks or somehow you have figured out how to guarantee that you will not be hit by a cyber attack, including but not limited to, ransomware, getting insurance now seems prudent.

Choosing the right insurance broker is very important and even though you have been dealing some broker for other insurance for years and like that person, if they don’t write cyber insurance all of the time, that is a dangerous move because of the complexity of that specialized form of insurance.

If you need assistance, please contact us.

Credit: Sky News

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