Why on earth would a bakery need cyber insurance? Great question. KBI Group explains the necessities of cyber insurance for bakeries, the statistics, and the risk of not having it.
If you have been reading the news lately you would have seen a local bakery in NSW suffered dearly from an online April Fools cyber attack which left them devasted – a Facebook error meant that account information held by the social media behemoth was made available on a hacking forum.
The Bodalla Bakery, with a rich history lost 14 years worth of social media efforts and they are having to rebuild their social media presence from scratch. We know all to well just how valuable social media is to businesses these days, it is how new customers find you, how they interact with you, and how they can become fabulous repeat customers. It is a chance for customers to get to know you, build trust and loyalty!
The Bodalla Bakery example is not isolated. For all businesses which have some sort of online presence, the risk of a cyber incident has become a clear and present danger. It doesn’t matter if you run a single location small local bakery, a large national bakehouse with hundreds of stores, or you supply and/or manufacture bakery equipment, the risk is real if you:
- Have a website or use the internet for doing business including accepting any form of digital payments.
- Use technology like a computer/mobile device or cloud hosting services for daily operations.
- Hold current, past or future customer data/details (including but not limited to customer names, email addresses, phone numbers). This might also be in the form of a customer loyalty program.
- Store employee information digitally.
There are other examples in the media in recent years of similar cyber incidents, both in Australia and abroad which specifically involve bakeries.
In 2021 the famous Vili’s Pie Shop in South Australia was the target of a cyber attack. Bakers Delight had an incident in 2018 which involved a data breach through use of a third party provider for building an online form. In the UK, Gregg’s, a national bakehouse suffered an incident where online hackers changed the company’s logo and slogan to something less than desirable. The risk faced by businesses is growing as more of our daily lives move online, so being aware of the risks and how to mitigate them is critical.
If or when a cyber incident hits, will your business be prepared for the consequences? The after effect from a cyber attack can be devastating:
- First and foremost losing customer trust and loyalty!
- The cost of hiring experts to investigate and resolve the incident
- Lawsuits and regulatory fines
- Paying ransomware or extortion demands
- Repairing and replacing damaged equipment or software
- Recovering or restoring lost or corrupted data
As outlined above the consequences can be severe, and the cost of responding to them even worse.
The statistics
As you can imagine the data concerning cyber incidents is huge – and growing. In Australia, one of the best places to look at the data is through the Australian Cyber Security Centre (ACSC), an organisation falling under the Australian Signals Directorate. Similarly, there is also a ton of reporting and statistics provided by non-government organisations, especially the big forensic firms like KPMG, PWC, and Deloitte to name a few.
The ACSC is a treasure trove of great information and the best place to start when learning about cyber security, the threats and how to improve your own cyber security. To show just how prevalent cyber incidents are, the ACSC received nearly 94,000 reports in the 2022-2023 Financial Year, or one report every 6 minutes! Some of the key cyber security trends during this time were data theft and disruption of business, ransomware and extracting maximum dollars from victims, and data breaches. Furthermore, the average cost of cybercrime was also up 14% on the previous period which for small businesses was $46,000!
Whichever way you cut the pie, cyber security and cyber insurance are becoming critical to everyday business operations. Understanding cyber exposure as well as how to respond to cyber incidents is of utmost importance.
Managing cyber risk
Hopefully we have demonstrated that bakery businesses are not immune to cyber threats, like all retail businesses, cyber insurance for bakeries is essential! However, there are ways to lower the risk and manage this exposure in a meaningful way.
It often makes sense to do a digital risk assessment to identitify and work through some of the cyber exposures we have mentioned above. Some of the proactive measures bakery businesses can easily take include:
- Employee training and awareness programs to minimise the chance of human error
- Incident response plans – these can be basic all the way up to very sophisticated
- Understand basic cyber hygiene for your business – data backups, antivirus/firewalls and network security where applicable
- Understanding how often system and software updates should occur
- Password protection and restricted access – depending on the size and nature of the bakery business (and what records the business holds)
There are many more risk management steps that could be taken and there are a lot of resources on how to best protect and manage cyber risk (for example the ACSC is a great place to start). Often a good question to ask is – what would happen to our business if there was a cyber attack? Could we still operate? How dependent are we on our digital systems?
Cyber Insurance for bakeries – here to help!
In addition to the above risk management steps, a further risk management strategy is to take out a cyber insurance policy to further enhance your digital defences and provide peace of mind.
Cyber insurance for bakeries cover can take many forms, and is quite a mature product having been developed over two decades ago. There are many providers in Australia and each policy can be slightly different so it is important to have an expert insurance adviser in your corner.
The main advantage from taking out cyber insurance is the financial relief it offers when a cyber incident occurs. Cyber insurance for bakeries can often help maintain customer trust and loyalty, it can help with the cost of notifying any affected customers about their personal records being stolen and it can certainly be a massive help when it comes to assessing, managing and working with the business to ensure similar attacks do not happen again.
At KBI we specialise in cyber insurance for bakeries (and all things bakery insurance!) and work with many of the top providers in Australia. Through our work with the NBIA and existing bakery customers nationally we have a firm understanding of bakery needs and can help navigate the risk and insurance landscape. Talk to the team at KBI Group about cyber insurance for bakeries today.
KBI PTY LTD is an Authorised Representative (450152) of KBI Group Pty Ltd (ABN 56 167 437 121, AFSL 494792). Any advice in this article is general in nature and does not take your personal circumstances into account. When considering the purchase of an insurance policy, you should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the KBI Financial Services Guide and relevant product disclosure statement.