Discover the trend, meet the trendspotter.
Cyber risk to equipment
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The trendspotter
“In my role, we are always on the lookout for changes in equipment and technology so that we can make sure our coverage keeps pace with changing exposures to better protect our policyholders. As equipment has evolved and become increasingly connected to other equipment and to the internet, it has been easy to make the connection between cyber risk and equipment breakdown. HSB is unique in that not only do we have equipment expertise, but we are also cyber experts. We are comfortable with both types of risk and understand the need to provide protection that other carriers might not.”
Janani Rajappan,Product Underwriting Lead
You probably don’t think about the risk of equipment damage caused by cyberattack. We do.
The trend
The rise of cyber crime
When cybercriminals attack a business, they can access more than the data needed to run the business or the personal information of employees and customers. In our increasingly connected world, they may also take control of equipment that is the heart of the business.
Businesses are increasingly connecting devices and equipment to each other and to the internet. This connectivity enables businesses to run more smoothly and efficiently. That means, however, that once inside a computer system, hackers also may have access to everything connected to it.
Who’s at risk?
All of us. From big manufacturers to Main Street Mom ’n Pop shops, all are susceptible to cyberattack that could result in damage to connected equipment. Larger businesses will often have some protections in place. They may even have a risk manager and best practices in terms of how they protect themselves from cyber risk. It's harder with a smaller business. First, they may not have the awareness and, second, they may not have the resources to invest to protect themselves.
A cyberattack can damage more than the big machines that make things. It can impact building systems such as HVAC equipment and elevators, or damage refrigeration systems, leading to food spoilage. Basically, any equipment that is connected to the internet is at risk for a cyber event that could damage that equipment and cripple a company's day-to-day operations.
The noise around silent cyber
When an insurance policy does not mention a certain exposure, it is silent on that exposure. Coverage is neither expressly included nor excluded. Policy forms that have not been updated are likely “silent” on equipment breakdown caused by a cyber event; they do not mention it. Whether or not there is coverage for damage to equipment is not clear.
How HSB is taking on the trend
Combining HSB’s engineering expertise with our knowledge in the cyber arena, HSB TechAdvantage™ Equipment Breakdown coverage aligns with our company-wide belief that protecting against equipment breakdowns today must include protecting against equipment breakdowns caused by cyberattack.
At HSB, we are constantly watching, looking for trends, studying them, and identifying solutions.
Access our knowledge base and learn more about HSB’s innovative risk solutions using the links below.
