Cyber attacks aren’t just aimed at websites, computerized databases, and other digital assets. They also target physical assets such as industrial equipment. Late last year, cyber attackers struck a German steel mill and caused massive damage to the facility. Using a technique known as “spear fishing,” cyber criminals stole logins and passwords, accessed furnace control systems, and then caused the equipment to malfunction.
According to a 2015 study by The Travelers Companies, cybersecurity tops the list of risk-related concerns for manufacturers. Not all insurance policies cover property damage from non-physical causes, however, so manufacturers may want to check their coverage. Even if property policies are in place, companies may also need protection against business interruptions and the loss of intellectual property.
Cyber attacks aren’t the only risks that manufacturers face either. For food and beverage manufacturers, safety events, product recalls, and allegations about mislabeling can do more than damage a company’s reputation. Along with fines and penalties, companies may need to pay for crisis communications. That’s why industrial hygiene labs, a resource that many insurers offer, are also a part of food safety risk management.
Offshoring and reshoring can also increase risks. Manufacturers who depend upon foreign suppliers or send operations overseas may experience supply chain disruptions or quality control issues. Companies that reshore hire new employees, but less-experienced workers typically account for a greater percentage of workplace injuries. By managing these and other risks, however, manufacturers can protect their profitability.
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