Cyber breach insurance

5 Cyber Risks Facing the Logistics Industry

Cyber risks that face the logistics industry


Threats targeting the transportation and logistics sector can come from many sources: criminals, terrorist groups, hacktivists, disgruntled or former employees, nation sales, competitors, traditional network operation mistakes, and many more. However, there is cover to help with many of these threats included within a Cyber insurance policy. Crucially, this cover is not included in other lines of business such as Property, General Liability or Commercial Combined policies.

1. Business/Network Interruption

If suppliers use external computer networks to operate their businesses, there is a risk of contingent system failure. Connected systems will only be as secure as the weakest link, so if those external networks stop (or are prevented from) working, the firm may not be able to receive or fulfil orders, creating a business interruption loss not covered by a Property policy.


2. Data Attack

A direct attack on the firm's network. If it is corrupted or altered, a transportation company may not be able to fulfil its professional service of moving perishable goods from point A to B. As a result, the company may be held financially responsible for spoilage, lost shipments and more.


3. Human Error

Mistakes made by staff or suppliers result in a data breach.


4.  GDPR Breach

All companies hold the private financial personal and health information of their employees, as well as account numbers and other protected information of clients. A privacy risk exists even if these are files held in a paper format, and firms must ensure they have appropriate security measures in place to protect this personal data. This is the 'integrity and confidentially' principle of the infamous General Data Protection Regulation or GDPR); this risk can be covered by a cyber policy.


5. Operations of Essential Services 

In addition to GDPR, all but the smallest UK transportation firms are also subject to the EU NIS Directive (enacted in UK law as The Network and Information Systems Regulations 2018) - the first piece of EU-wide cyber security legislation aimed at achieving a high common level of network and information system security across the EU's critical infrastructure. Transportation firms are considered Operators of Essential Services and if found to be non-compliant, they could be fined up to £17 million.


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