Cyber Insurance Considerations after Colonial Pipeline

The United States of America woke up on Monday May 9th 2021 to the news that a group of cyber attackers had successfully taken down the Georgia-based Colonial Pipeline. This pipeline carries, daily, roughly 45 percent of the fuel used by the East Coast of the country.

Cyber attacks are not new, in fact as recently as December 2020 CCW Global highlighted the need for companies and businesses to reevaluate the security around their digital assets.

Unfortunately, the current economic climate presents a prefect ecosystem for cyber criminals; work from home, the explosion in web connected technologies and remote access systems, and the general focus on simply continuing operations rather than securing them, have allowed an environment that has enabled cyber criminals to expand their scope and be more successful in their activities.

The current age is promising change and upheaval on a scale never before seen – and this change is crossing over into every aspect of our global society. Increasing costs of living, the instability of global markets, and even international geo-politics are all creating a situation where cyber criminals are able to not only survive, but thrive.

Why does the Colonial Pipeline hack matter?

For almost 2 decades there have been fears that American infrastructure is at risk to a cyber-attack. In the case of Colonial Pipeline, the attack was a Ransomware event. The business owning the pipeline was locked out of its computer systems and network, with a demand made for payment in return for reinstating access.

As previously mentioned, Colonial Pipeline transports roughly 45 percent of the daily oil used on the East Coast of America – oil it is unable to deliver while the pipeline is shut down. Perpetrated by Russian Crime group, Darkside, the Colonial Pipeline hack is extremely worrying as it shows how, in an interconnected global economy, a business slowdown for one company can lead to major economic consequences on a regional, or national basis. In fact, because of the Pipeline ransom and subsequent closure, the United States Government has issued an emergency waiver allowing increased transportation of oil via truck and on overland routes.

Colonial Pipeline is not a small organization, it is not a SME. This is a major part of the American energy market, and its operations ensure the life of cities across the East Coast.

Colonial Pipeline was using cloud-based services for some of its data and servers. The Russian hackers gained access to these services and locked almost 100 gigabytes of data. The data has not left the servers which initially held it, but the company is unable to access the information it needs to carry on its daily operations. At present, while 4 main pipelines are shut down, impacting commodities markets and fuel consumers in affected states, Colonial Pipeline has stated that some smaller lines between terminals are once again in operation.

However, as the event continues into its fourth day, drivers and businesses being served by the pipeline are now starting to feel the impact of the hack. The demand for petrol by consumers is going to lead to an increase in the overall cost of oil – which will increase the longer the pipeline is shut down. If the pipeline does not get up and running soon, then Airlines may potentially start to be hit; causing disruption to the nascent return the travel industry was experiencing.

Taking out this critical piece of infrastructure has had widespread and severe effects, and its not because Colonial Pipeline did not have security or was unprepared for the attack (although experts argue that they may have been able to do better).

Businesses Should be Concerned

The attacks targeting Colonial Pipeline were extremely sophisticated, and were able to defeat security controls where they existed. The fact that this was a ransomware event is simply the cherry on top of the cake, as ransomware is the most common form of cyber-attack experienced by organizations globally.

By now we should all be aware that Cyber Crime is not some aberration – it is a low cost, and effective way for criminals to achieve their malicious objectives (getting money).

Cyber Criminals do not stop, and they do not sleep. In fact, with the change in work habits and disruption to work places in the wake of the global Covid-19 coronavirus pandemic, there has actually be a global spike in Cyber Crime events. From a 15-fold increase in Cyber Crime in the United Kingdom through to Webhosts giving your details to criminals, the scope and scale of cyber crime in the 21st century is staggering. Criminals are innovative, driven, and constantly coming up with new methods with which to target businesses.

While Phishing and Trojans may be old hat these days, and businesses are aware of these risks, that doesn’t change the fact that companies will not be fully prepared for the next big cyber crime idea. The fact that Colonial Pipeline, such a key and critical part of American infrastructure, fell victim to cyber criminals proves this; and its not because Colonial Pipeline didn’t have the necessary protections, or that they left their network unsecured.

Cyber Criminals will attack targets of convenience. This could be a multi-national fortune 500 company, or a mom-and-pop shop; as far as cyber criminals and hackers are concerned, all companies are equally valid. This means that your business is at risk.

As much as we’d like to ignore the specter of cyber-crime, and imagine that our company will never fall victim to such a threat, the truth is that cyber events are here to stay, and are only getting worse.

Insure Your Business against Cyber Crime

The best way to ensure that you are protected against Cyber Events is to invest in your network and security systems; but even this doesn’t guarantee that you will not fall victim to criminals. The only way to ensure business operations are not interrupted and that you are not exposed to massive financial liability, is through a comprehensive Cyber Insurance Policy.

Designed to meet the specific needs of each individual organization obtaining coverage, Cyber Insurance products are bespoke solutions tailored to meet the requirements of a company. Whether this is with a comprehensive policy, or one which only covers against a single risk, Cyber Insurance is designed to do what your business needs it to.

• With coverage available for:
• Disclosure Liability
• Business Interruption
• Vandalism Losses
• Crisis Management Expenses
• Ransom Payments

Cyber Insurance is the only way to ensure that even if you do fall victim to an attack, your business will be able to carry on.

For more information please Contact CCW Global today.