More than ever before, organisations are aware of the potential financial impact of a cyber-attack but whilst those expenses represent a considerable hit, damage to an organisation’s physical assets can be just as harmful.
Cyber-attacks that cause physical damage typically occur when a hacker gains access to a computer system that controls physical equipment. After the hacker gains access to an organisation’s machinery, they can then control that equipment to damage it or other property.
These types of events can lead to major disruptions and costly damages. To safeguard their physical assets, it’s critical that organisations understand what types of businesses and assets are exposed to these attacks.
What’s at Risk?
To better understand what kinds of physical losses can occur following a breach, it’s helpful to compare cyber-attacks to an industrial accident. Following these kinds of incidents, organisations often incur costs to repair and replace damaged equipment in addition to any lost revenue caused by the disruption.
Unlike industrial accidents however, cyber-attacks that cause physical damage aren’t limited to a geographic location and can impact an entire network. This means that damages caused by a breach can be widespread, affecting multiple sectors of the economy depending on the target.
Because of this, cyber-attacks that cause physical damage are often dynamic and extensive. When an attack on critical infrastructure occurs, it not only affects business owners and operators, but suppliers, stakeholders, and customers as well.
Who’s at Risk?
Cyber-attacks are constantly evolving. Incidents can occur in a variety of ways, including phishing scams, internet exchange point attacks, breaches of unsecured and unencrypted devices, and even plots carried out by rogue employees.
When discussing these attacks, many experts cite power and energy sector organisations as the most at risk. However, vulnerabilities also exist in utilities, telecommunications, oil and petrol, petrochemicals, mining and manufacturing, and any other sectors where industrial control systems (ICSs) are used.
ICSs are open computer systems used to monitor and control physical processes as well as streamline operations and repairs. ICSs are not often designed with security as a primary consideration, which leaves them susceptible to attack. What’s more, for many automated processes, attacks don’t even need to cause physical damage to result in significant disruption and losses.
Real-world Examples
Ukrainian power grid attack
This was a multistage, multisite attack that disconnected seven 110 kilovolt (kV) and three 35 kV substations. Together, the attack resulted in a power outage for 80,000 people and lasted for three hours. Using only a phishing scam, the attackers were able to cause substantial, prolonged disruption to the economy and general public.
Saudi Arabian computer attacks
In these incidents, hackers destroyed thousands of computers across six organisations in the energy, manufacturing, and aviation industries. Through a simple virus aimed at stealing data, computers were wiped and bricked. Not only did this mean critical business data was lost forever, but all of the damaged computers had to be replaced. This attack was similar to an attack on Saudi Aramco, the world’s largest oil company, which destroyed 35,000 computers.
Petrochemical plant attack
This attack targeted a Saudi Arabian petrochemical plant. The attack was unique in that it wasn’t designed to steal data, but rather sabotage operations and trigger an explosion. The only thing that prevented an explosion was a mistake in the attackers’ computer code. Had the attack been successful, the plant would likely have been destroyed and many employees could have died. Experts are concerned that similar attacks could be carried out across the globe.
Hospital ventilation attack
In this incident, a hacker was able to damage and control a hospital’s heating and air conditioning system using malware. This attack put the safety of staff, patients, and medical supplies in jeopardy, as the hacker could control the temperature of the facilities at will.
How Do I Protect My Organisation?
Even if your commercial insurance policy includes physical or non-physical damage covers, that does not necessarily mean you’re covered from first or third-party losses from cyber-attacks.
The level of protection your company has depends largely on the structure of your policies. As such, it’s critical for businesses to do their due diligence and understand their policies.
While it’s important to speak with a qualified insurance broker about your cyber-risk policy options, there are a number of steps businesses can take by themselves to protect their physical assets.
In addition to implementing a cyber-risk management plan, businesses should consider doing the following to protect their data:
– Keep all software up to date.
– Back up files regularly.
– Train employees on cyber-risks and what they should do if they notice anything suspicious.
– Review your exposures and speak with your insurance broker to discuss your options.
https://www.turnerinsurance.co.uk/commercial/cyber-liability/