Understanding Cyber Liability Insurance Coverage for Trucking Companies

With the ever-increasing dependence on technology in today’s world, businesses of all sizes are becoming increasingly vulnerable to cyber attacks.

This is especially true for trucking companies, which rely heavily on digital systems for everything from fleet management and dispatching to driver logs and payroll.

Common Cyber Attacks to Trucking Companies

The trucking industry is increasingly relying on technology, making it a prime target for cyberattacks. These attacks can cause significant financial losses, operational disruptions, and reputational damage. Here are some of the most common types of cyberattacks faced by trucking companies and truckers:

Ransomware

Hackers encrypt a company’s data and demand a ransom payment in exchange for the decryption key.
In 2019, a trucking company in Illinois paid $78,000 to regain access to its systems after a ransomware attack.
This type of attack can disrupt a trucking company’s operations and lead to lost revenue.

Data Breaches

In an event of a data breach, hackers gain access to sensitive company data, such as employee records, customer information, or financial data.
This data can be used for identity theft, fraud, or other criminal activities.
A data breach can damage a trucking company’s reputation and lead to legal liabilities.

Phishing Attacks

Hackers send emails that appear to be from a trusted source, such as a bank or a vendor.
These emails often contain a link that, when clicked, takes the victim to a fake website that looks like the real website.
Once the victim enters their login information on the fake website, the hackers can steal their data.
Phishing attacks can be used to target employees of trucking companies or truckers themselves.

Malware Attacks

Hackers install malicious software on a computer system without the owner’s knowledge.
This software can steal data, spy on the victim’s activities, or take control of the computer system.
Malware attacks can be used to target trucking companies’ systems or truckers’ personal devices.

Business email compromise (BEC)

This is a type of fraud where a hacker impersonates a trusted individual, such as a vendor or CEO, in order to trick you into sending them money or sensitive information.

GPS Spoofing

Hackers send fake GPS signals to a truck’s navigation system, causing it to display incorrect location information.
This can be used to divert trucks from their intended routes or to steal cargo.
GPS spoofing is a serious threat to the trucking industry, as it can lead to accidents, cargo theft, and other losses.

Social Engineering

Hackers trick victims into giving them access to sensitive information or systems.
This can be done through phone calls, emails, or other forms of communication.
Social engineering attacks can be used to target employees of trucking companies or truckers themselves.

Mobile App Attacks

Hackers exploit vulnerabilities in mobile apps to steal data or take control of devices.
Many trucking companies use mobile apps for dispatching, tracking, and communication.
Mobile app attacks can disrupt trucking operations and lead to data breaches.

In-Vehicle Attacks

Hackers gain access to a truck’s computer systems through the vehicle’s diagnostic port.
This can be used to disable the truck’s brakes, steering, or other critical systems.
In-vehicle attacks are a serious threat to public safety, as they can lead to accidents and injuries.

Supply Chain Attacks

Hackers target a trucking company’s suppliers or vendors in order to gain access to the company’s systems.

This can be used to steal data, disrupt operations, or launch other attacks.
Supply chain attacks are a complex threat that can be difficult to defend against.

Fake Load Board Scams

Cybercriminals create fake load board websites to lure trucking companies into signing up and bidding on loads.
Once a trucking company accepts a load, the cybercriminals disappear with the money.
Fake load board scams can be costly for trucking companies, as they lose time and money bidding on fake loads.

These are just a few of the many types of cyberattacks that trucking companies and truckers face. It is important for all parties in the trucking industry to be aware of these threats and take steps to protect themselves.

Cyber Risk Coverage vs Cyber Liability Coverage for Truckers: The Difference

Cyber risk coverage and cyber liability coverage are two types of insurance that can help protect trucking companies from cyberattacks. However, they cover different things.

Cyber risk coverage is a broader term that encompasses all potential financial losses, operational disruptions, and legal liabilities associated with cyberattacks and other cyber incidents. It goes beyond just the financial coverage offered by cyber liability insurance.

Cyber liability insurance focuses primarily on the financial costs associated with a cyberattack, such as legal fees, data breach notification, and ransomware payments.

What is Cyber Risk Insurance?

This coverage is a broader term encompassing all potential financial losses, operational disruptions, and legal liabilities associated with cyber attacks and other cyber incidents. It goes beyond just the financial coverage offered by cyber liability insurance.

Here’s a breakdown:

Scope

Cyber liability insurance: Focuses primarily on the financial costs associated with a cyberattack, such as legal fees, data breach notification, and ransomware payments.
Cyber risk coverage: Covers a broader range of potential losses, including operational disruptions, reputational damage, loss of intellectual property, and regulatory fines.

Cyber Risks Coverage and Its Components

Cyber liability insurance: Offers specific types of coverage, such as first-party (costs incurred by the insured) and third-party (costs paid to others due to the insured’s actions).
Cyber risk coverage: Can incorporate various elements, including cyber liability insurance, business interruption insurance, crisis management coverage, and cybercrime coverage.

Benefits

Cyber liability insurance: Provides financial protection against the direct costs of a cyberattack.
Cyber risk coverage: Offers a more holistic approach to managing cyber risks by addressing both financial and non-financial losses.

Why is Cyber Risk Coverage Important?

Cyber attacks are becoming increasingly sophisticated and frequent, posing a significant threat to businesses. Cyber risk coverage can help organizations:

Mitigate financial losses: Cover the costs associated with responding to and recovering from a cyberattack.
Minimize operational disruptions: Help organizations get back to business quickly after an attack.
Protect their reputation: Manage the reputational damage that can result from a data breach or other cyber incident.
Comply with regulations: Many businesses are required by law to have certain types of coverage that minimizes cyber risks.

Cyber Liability Insurance and Coverage

Cyber liability insurance is a type of insurance policy designed to help businesses protect themselves from the financial losses associated with cyber attacks.

It provides coverage for a variety of costs, including:

First-party coverage

Legal expenses and legal fees incurred in defending against lawsuits resulting from a cyber attack.
Data breach notification costs, such as the cost of notifying affected customers and providing credit monitoring services.
Regulatory fines and penalties.
Costs associated with restoring data and systems that have been damaged or destroyed by cyber attacks and data breaches.
Business interruption losses, such as lost revenue and profits due to a cyberattack.
Cyber extortion coverage, which helps businesses pay ransoms demanded by hackers in exchange for the decryption of their data.

Third-party coverage:

Damages awarded in lawsuits filed by customers, employees, or other third parties who have been harmed by a cyberattack.
Costs associated with defending against lawsuits filed by third parties.

Additional coverage options:

Cybercrime coverage: Provides coverage for the costs associated with investigating and prosecuting a cybercrime.

Crisis management coverage: Helps businesses manage the reputational damage that can result from a cyberattack.

Privacy liability coverage: Provides coverage for the costs associated with violating data privacy laws.

Cyber extortion coverage: This covers the costs associated with responding to a ransomware attack, such as the ransom payment and the cost of restoring your data.

What Isn't Covered by Cyber Insurance?

While cyber insurance offers valuable protection against various cyber threats, it doesn’t cover everything. Here are some key areas typically excluded:

Pre-existing conditions: Cyber insurance policies typically won’t cover losses arising from cyber vulnerabilities or incidents that existed before the policy’s inception. This means you need to address existing vulnerabilities before coverage kicks in.

Intentional acts: Cyber insurance policies generally exclude coverage for losses arising from intentional acts of the insured or its employees. This includes deliberate data breaches, system sabotage, and cybercrime committed by insiders.

War and terrorism: Most cyber insurance policies won’t cover losses related to war, terrorism, or other acts of violence. This is because these events are considered uninsurable due to their unpredictable nature.

Regulatory fines and penalties: While some cyber insurance policies offer limited coverage for regulatory fines and penalties, many exclude them altogether. It’s important to check your specific policy wording for clarity.

Business interruption due to non-cyber events: Cyber insurance focuses on losses directly caused by cyberattacks. It won’t cover business interruptions resulting from other events, such as natural disasters, power outages, or equipment failures.

Devaluation of assets: Cyberattacks can damage a company’s reputation and intellectual property, impacting its market value. However, cyber insurance typically doesn’t cover the loss of value itself, only the costs associated with mitigating the damage.

Future lost profits: While cyberattacks can lead to lost profits, cyber insurance rarely covers projected future losses. It primarily focuses on actual financial losses incurred during the covered period.

Human error and negligence: Many cyberattacks occur due to human error or negligence. While some cyber insurance policies might offer limited coverage for such incidents, they often require proof that the insured took reasonable precautions to prevent the incident.

Social engineering attacks: Some cyber insurance policies exclude coverage for losses resulting from social engineering attacks, such as phishing or business email compromise (BEC), due to the difficulty in proving the insured’s lack of negligence.

Cyber extortion involving voluntary payments: If a company voluntarily pays a ransom demand without exhausting all other options, their cyber insurance might not cover the payment. This is because the policy encourages exploring alternative solutions first.

It’s important to note that these are just general exclusions, and specific policy wording can vary. Always carefully review your policy and consult your insurance provider for a complete understanding of what is and isn’t covered.

Why do Trucking Companies need Cyber Insurance?

Trucking companies are particularly vulnerable to cyberattacks because they collect and store a large amount of sensitive data, including:

Driver information: This includes names, addresses, Social Security numbers, and driver’s license numbers.

Vehicle information: This includes vehicle identification numbers (VINs), license plate numbers, and GPS tracking data.

Freight information: This includes the type and value of the goods being transported, as well as the origin and destination of the shipment.

Where to Get Cyber Liability Insurance Coverage

A cyber attack on a trucking company could result in the theft of this sensitive data, which could then be used for identity theft, fraud, or other criminal activities. In addition, a cyber attack could disrupt a trucking company’s operations, leading to delays in deliveries and lost revenue.

Cyber liability insurance can help trucking companies protect themselves from the financial losses associated with a cyberattack. It can also provide them with the resources they need to respond to an attack quickly and effectively.

To minimize the risks of cyber threats to you trucking business, a comprehensive cyber coverage on your insurance policy is a must. CTI is here to help you find the right cyber insurance to protect you and your trucking business operations. Request an instant quote now and find the right cyber liability insurance policy for you.