Future implications of Industry 4.0

Designing and assembling cyber protection for manufacturers

When you consider the risks your manufacturing clients face, you may be tempted to focus on traditional risks, including equipment breakdown, product recalls and injury to employees. But would cyberattacks top your list of potential risks?

With the technological advances being made within the manufacturing industry, now is the time to start the conversation about the correct insurance solutions that can help manufacturers address cyber claims made against their company should they experience a cyberattack.

More connections, more risk

The U.S. Department of Homeland Security recently named manufacturing as the industry with the second highest documented reports of cyberattacks.1 Why the high placement?

Until recently, manufacturing networks were separated from the rest of the world by “air gaps” — essentially, the industry’s networks were physically disconnected from digital business networks and the internet. As digital manufacturing has advanced, dawning what is called Industry 4.0, more systems are being linked. Though these connections may be new, the systems may be aging, making companies and equipment easy targets.

Cyberattacks of
manufacturing enterprises:

  • 2/3 hacking
  • 1/3 malware


were targeted, pursuing research and development of new solutions


involved theft of intellectual property to gain competitive advantage

Source: Verizon 2018 Data Breach Investigations Report

What the hack do they want?

While hackers may attempt to access manufacturers’ banking information, more likely they seek trade secrets, including theft of intellectual property and technology. Manufacturers also may be victims of malware and ransomware that could shut down operations, impacting their own supply chains and those of business partners and vendors.

In fact, the Verizon 2018 Data Breach Investigations Report says the manufacturing industry experienced 536 cybersecurity incidents and 71 cyber breaches that year. And these can be costly breaches: Kaspersky Lab estimates the cost of a data breach for small- to medium-sized enterprises to be approximately $149,000.

Unfortunately, this threat extends beyond the factory floor. In recent years, hackers accessed the computer control modules of a small number of several popular vehicles, taking over critical operating systems and resulting in the recall of more than 1.4 million2 vehicles. This example highlights the need for broad insurance coverage as it can be hard to predict how far-reaching the impact of a hack may be.

Not out of the woods

During the coming years, industry experts expect to see continued digitization and full adoption of Industry 4.0. As your clients modernize and network more operations, you have an opportunity to offer valuable guidance on the coverage options that can help protect them from the growing threat of cyberattacks and the proactive steps they can take to help mitigate their risk.


Massachussetts Manufacturing Extension Partnership
BBC News