The hospitality industry, like others, have had to reinvent themselves since the start of the pandemic. While hoteliers, restaurateurs, and other business owners forged new methods of surviving and thriving during the pandemic, this time unfortunately also brought new attack vectors and vulnerabilities to exploit. Protecting your organization and assets from this complex and rapidly evolving threat is no longer optional and can also be difficult.
Cyber attacks are not relegated to certain hours, operating environments, or location. The hospitality industry is especially vulnerable to cyber risks due to various required brand partner software or networks, influx of customers that could be the attackers, high staff turnover rate, and the multitude of vendors required to run your operation. According to IBM’s 2021 Cost of a Data Breach Report, the average cost of a data breach is $3.28 million with an average cost (per each lost or stolen record) of $161.
Quick Service Restaurants
Point-of-Sale data breaches are the most common cyber-attacks for Quick Service Restaurants (QSRs). QSRs have seen a change from staff to self-service ordering kiosks. These devices are all built on new or existing networks that can be susceptible to malware attacks, both from the kiosk itself and from the network.
Full-Service Restaurants
With e-commerce food delivery platforms being integrated with new apps and hardware, restaurants have a great deal more exposure for breaches that may not have been considered with their current IT infrastructure.
Given the rising incidence of cyber-crime, especially in these challenging times, minimize your risk with the following 4-pronged approach:
- Make sure anything sensitive is encrypted, including company passwords and personally identifiable information of employees and customers.
- Install strong firewalls and intrusion detection systems. Develop robust policies and procedures pertaining to document handling.
- Develop an incident response plan in advance. Don’t wait until a breach occurs to create a response and continuity plan – be sure to involve legal counsel, a notification vendor, and a public relations firm.
- Transfer your risk. Examine all vendor, cloud, and partner contracts. Do liability agreements indemnify you should they cause a breach of your data? Have you demanded proof of insurance?
INSURANCE PROTECTION
Fortunately, the insurance industry has developed policies that can transfer these risks. The basic elements of a cyber liability insurance policy can typically include coverage for the following:
- Forensic Expense
- Legal Expense
- Notification Expense
- Regulatory Fines and Penalties
- Credit Monitoring and ID Theft Repair
- Public Relations Expenses
- Liability and Defense Costs
In addition, crime insurance policies can cover fraudulent fund transfers associated with e-mail phishing or social engineering, which is the latest human-based fraud being used to steal from companies.
Cyber risks are a very real issue that can impact any business and have a lingering effect on your ability to operate. Taking the proper risk management steps, as well as obtaining the proper insurance coverage, will help ensure that your bottom line is protected. Working with a specialty insurance broker, who understands the hospitality industry’s unique coverage issues and negotiates coverage that is customized towards your business’ risks, is key in preventing additional disruption to your business.
