A cybersecurity threat is any event or action that could damage your business’ computer systems, steal your data, or bring your operations to a halt because of its effect on your tech.
Businesses like yours face a growing number of these threats each year. Let’s examine how to conduct a cybersecurity risk assessment and protect your business with cyber liability insurance from the Food Liability Insurance Program (FLIP).
What Are the Biggest Cybersecurity Risks for Food Manufacturers?
Because technology is such a huge part of how you do business, your food or beverage manufacturing business faces cybersecurity risks from many different angles.
We get it — it’s not fun to think about these things. However, knowing the risks is the first crucial step in learning how to protect your business from them.
Data Breaches
What it is: Someone gets their hands on personal or private information they are not authorized to access and steals, exposes, sells, and/or deletes it.
Example: A hacker accesses your customer database, where you keep payment information, shipping addresses, and contact information, and sells it on the dark web.
Supply Chain Vulnerabilities
What it is: When a cybercrime affects you through a third party, such as a supplier, vendor, or partner.
Example: Your flour supplier falls victim to a data breach and fails to deliver a shipment on time, costing you thousands of dollars in lost sales.
Ransomware
What it is: A type of software designed to hold your computer hostage until you pay a specified amount of money.
Example: You open an email attachment and unknowingly download ransomware onto one of your business computers. Suddenly, your computer is locked, and the ransomware threatens to wipe your hard drive unless you pay $50,000 to get it back.
Phishing
What it is: When a cyber criminal pretends to be a person, business, or organization you trust to get you to provide sensitive information. This includes passwords, identification numbers, and banking information.
Example: You receive an email that appears to be from one of your suppliers urging you to address an unpaid invoice by clicking a link. Because you followed the link thinking you needed to pay, a hacking group now has access to your banking information.
Lack of Employee Awareness
What it is: Unless they are properly trained to recognize common cyberattacks like phishing and ransomware, some employees may fall victim to these schemes. This puts your business’ and customers’ information at risk.
Example: An employee clicks on a link in a phishing email because they didn’t recognize the signs and accidentally gives cybercriminals access to your banking information.
Outdated Software
What it is: Old software is vulnerable to cyber attacks because it can’t keep up with the new ways criminals are able to target and steal from your business.
Example: Cybercriminals hack into your 10-year-old inventory management system because it doesn’t have the protections that the most recent version of that system has.
How Cybersecurity Risks Can Disrupt Your Food Manufacturing Business
Each of the above cybersecurity risks can have a variety of negative impacts on your food manufacturing business. Even if the incident itself only lasts a day or two, you may experience lasting effects for weeks, months, or even years, depending on how severe the attack is.
| Risk | Impact |
|---|---|
|
Operational Disruptions |
Imagine being unable to access your records because of a ransomware attack holding your computer hostage. You can’t run your business as usual until you’re able to resolve this issue. This could lead to delayed shipments and orders, the inability to process customer payments, and unpaid invoices. |
|
Financial Losses |
Cybersecurity incidents are expensive. According to IBM’s 2024 report, U.S. small businesses can expect to pay anywhere from $120,000 to $1.24 million to resolve a data breach. Most businesses cannot afford this, and will either suffer a major financial hit or be forced to close as a result. |
|
Legal Penalties |
Customers, suppliers, and anyone else whose information is stolen during a data breach may choose to sue you for negligence. They may claim you didn’t take the proper precautions to prevent something like this from happening.
|
|
Reputational Damage |
If people see your business in the news because of a cyberattack that affected your customers’ information, they probably won’t feel comfortable buying from you. They might fear their payment details could one day be compromised, too. |
Why You Need Cyber Liability Insurance for Your Food Manufacturing Business
If you’ve broken a sweat reading through these risks for your business, we get it. Cybersecurity incidents aren’t just expensive — they’re unfortunately quite common, too.
46% of all cyberattacks affect businesses with fewer than 1,000 employees, meaning small to mid-sized businesses are still vulnerable despite having fewer resources to weather one.
That’s where cyber liability insurance comes in. This coverage aims to cover some or all of the costs you’d face in a cyberattack, so you aren’t forced to pay hundreds of thousands of dollars in out-of-pocket expenses.
Cyber liability insurance is designed to cover two different types of costs resulting from a cyber attack:
- First-party costs: Financial losses you experience and file an insurance claim for after a cyber attack, such as restoring or replacing lost data
- Third-party costs: Expenses stemming from claims made against your business by other people, such as legal costs if a customer sues you over their compromised data (e.g., attorney’s fees, settlements, and judgments)
Having this policy in place can mean the difference between keeping your business running when the worst-case scenario happens and closing it down for good.
Please note that cyber liability insurance is not designed to cover payment processors, like Square or Stripe.
Pro Tip: Add cyber liability coverage to your FLIP policy for just $8.25 a month! Learn more about cyber liability insurance and how your business benefits from FLIP’s coverage.
How to Assess Your Cyber Risks and Protect Your Business
While you can’t reduce your chance of a cyberattack to zero, there are steps you can take to significantly reduce your risk and be proactive about protecting your business.
1. Perform a Cyber Risk Assessment
A risk assessment for cybersecurity threats is the best way to identify potential vulnerabilities that criminals can take advantage of. It’s a way of taking stock of your digital systems so you know what you need to improve upon.
Include the following steps in your food manufacturing risk assessment:
- Determine the likelihood of each of the above cyber threats happening to your business (e.g., if you regularly sell products online, there is a higher chance that customers would be affected by a security breach on your website)
- Understand the impact of each threat affecting your business (e.g., get clear on how much it could cost to recover stolen data, any reputational damage your business could suffer, etc.)
- Evaluate the effectiveness of cybersecurity measures you currently have in place, such as antivirus software and employee training, by looking for weak spots and vulnerabilities (e.g., outdated software, unencrypted sensitive data, etc.)
Pro Tip: When evaluating your own business’ cybersecurity measures, take a close look at your vendors and suppliers as well. Ask them to fill out a quick questionnaire to determine what steps they take to protect their business, such as using multifactor authentication, updating software, or training employees.
2. Implement Robust Cybersecurity Measures
Based on the most significant vulnerabilities you found in the first step, take action to mitigate your biggest risks by:
- Encrypting sensitive data
- Updating software regularly
- Training employees on best practices for cybersecurity
- Using role-based access controls to limit who can view sensitive information
- Installing reputable antivirus software like Norton or Bitdefender
- Including cybersecurity requirements in contracts with vendors and suppliers (e.g., notifying you immediately if a data breach occurs, maintaining up-to-date software, etc.)
- Creating a response plan for cybersecurity incidents that outlines what steps to take, from containing the attack to notifying customers, employees, and relevant third parties
3. Choose the Right Cyber Liability Coverage
With insurance, you can reduce the chances of being affected by a cyberattack and the impact it could have on your business.
Your cyber liability insurance policy should cover:
- Business interruption (the income you lose due to a cyberattack)
- Data breaches (including social media account hacking that leads to lost followers)
- Legal costs (attorney’s fees, settlements, and judgments)
- Network security failures
- Ransomware attacks
- Reputation management (e.g., hiring a PR or crisis management team)
- Third-party liability (if vendors or customers sue you after a cyberattack)
Psst… FLIP’s policy is designed to cover all of the above for only $8.25 a month. Compared to six- or seven-figure bills you could face on your own without insurance, the choice is obvious. Take action to protect your business and get cyber liability insurance today!
Alex Hastings
Seattle-based copywriter and (WA) licensed insurance agent Alex Hastings leverages her experience as a lover of fast-casual food, baked goods, and iced oat milk lattes. She holds a B.A. in Creative Writing from Western Washington University. Before working at Veracity, she was a retail copywriter at Zulily and an English language teacher in South Korea. Alex is fully trained on FLIP insurance coverages and writes content that connects food and beverage business owners with the policies they need.
Seattle-based copywriter and (WA) licensed insurance agent Alex Hastings leverages her experience as a lover of fast-casual food, baked goods, and iced oat milk lattes. She holds a B.A. in Creative Writing from Western Washington University. Before working at Veracity, she was a retail copywriter at Zulily and an English language teacher in South Korea. Alex is fully trained on FLIP insurance coverages and writes content that connects food and beverage business owners with the policies they need.
Kyle Jude
Kyle Jude is the Program Manager for Food Liability Insurance Program (FLIP). As a dedicated program manager with 10+ years of experience in the insurance industry, Kyle offers insight into different coverages for food and beverage business professionals who are looking to navigate business liability insurance.
Kyle Jude is the Program Manager for Food Liability Insurance Program (FLIP). As a dedicated program manager with 10+ years of experience in the insurance industry, Kyle offers insight into different coverages for food and beverage business professionals who are looking to navigate business liability insurance.