Restaurants Under Attack from Cybercriminals: How to Protect Your Business

As the restaurant industry becomes more reliant on technology, the risk of cyber attacks is rising. Cybercriminals are increasingly targeting restaurants, seeking to steal sensitive customer data and disrupt business operations. One study found that in 2016, the food and beverage industry accounted for ten percent of all data breaches. 

While many restaurant owners may not think they need to worry about cyber attacks, the reality is that no business is immune. That's why it's essential for restaurants to consider cyber liability insurance.

Why Are Restaurants Vulnerable to Cyber Attacks?

Restaurants are attractive targets for cybercriminals for several reasons. First, they typically store significant customer and employee data, including names, addresses, and credit card information. This data is highly valuable on the black market and can be used for identity theft, fraud, and other criminal activities. For example, POS systems have proven to be particularly vulnerable. 75 percent of all data breaches that impacted restaurants originated from a compromised POS system. 

Second, many restaurants rely on outdated or unsecured technology, making them easy targets for cyber attacks. Finally, restaurants are often understaffed and may need more resources to invest in robust cybersecurity measures.

How Are Cybercriminals Targeting Restaurants?

Cybercriminals use a variety of tactics to target restaurants, including:

Phishing attacks: Phishing attacks involve sending fraudulent emails or messages to trick employees into providing sensitive information. For example, a cybercriminal may send an email that appears to be from a trusted vendor, asking for login credentials or other sensitive information.

Malware attacks: Malware is a type of software that is designed to damage or disrupt computer systems. Cybercriminals may use malware to steal sensitive information, encrypt files, or take control of restaurant systems.

Ransomware attacks: Ransomware is malware that encrypts a company's files and demands payment in exchange for the decryption key. Restaurants are particularly vulnerable to ransomware attacks because they often rely on critical data to keep their businesses running.

Protecting your Restaurant with Cyber Liability Insurance

Cyber liability insurance is a type of insurance that helps protect businesses from the financial losses associated with cyber attacks. A cyber liability policy typically covers the following:

Data breach response: If a restaurant experiences a data breach, cyber liability insurance can cover the costs associated with responding to the breach, including notifying affected customers, hiring forensic experts, and providing credit monitoring services.

Business interruption: If a restaurant's systems are disrupted due to a cyber attack, cyber liability insurance can cover lost revenue and other expenses associated with the interruption.

Cyber extortion: If a cyber criminal demands payment in exchange for not releasing sensitive data or disrupting systems, cyber liability insurance can cover the costs associated with the extortion.

Legal expenses: Data breaches could cost you approximately $160,000, according to one study. With cyber liability insurance, the costs of hiring attorneys and other legal expenses can be covered.

Crisis management: If a restaurant experiences a cyber attack, cyber liability insurance can cover the costs associated with crisis management, including public relations efforts and other communications.

How to Pick the Right Cyber Liability Policy

When shopping for cyber liability insurance, restaurant owners should look for policies that provide comprehensive coverage tailored to their specific needs. Here are some key factors to consider:

Coverage limits: Ensure the policy provides adequate coverage for your business needs. Consider the potential financial losses from a cyber attack, including lost revenue, legal expenses, and data breach response costs.

Exclusions: Review the policy's exclusions carefully to ensure it covers the specific risks relevant to your business. For example, some policies may exclude coverage for social engineering scams or third-party liability.

Deductibles: Consider the deductible amount, which is the amount you will need to pay out of pocket before the insurance coverage kicks in. A lower deductible may result in higher premiums, so finding a balance that works for your budget is important.

Policy endorsements: Look for policies that offer endorsements, which are additional coverage options that can be added to the policy. For example, some policies may cover regulatory fines and penalties or cyber extortion.

Claims process: Ensure you understand the process and what is required to file a claim. Look for policies that offer 24/7 claims support and a streamlined claims process.

Reputation and experience: Choose an insurance provider with a strong reputation and experience in providing cyber liability insurance. Look for providers with a track record of successfully handling cyber claims and providing high-quality customer service.

Risk management resources: A good insurance provider should offer access to risk management resources, such as employee training, vulnerability assessments, and incident response planning. Take advantage of these resources to improve your cybersecurity posture and reduce the likelihood of a cyber attack.

Cyber liability insurance is essential for protecting restaurants from financial losses and reputational damage associated with cyber attacks. By understanding the key factors to consider when shopping for cyber liability insurance, restaurant owners can select a policy that provides comprehensive coverage and tailored protection for their business.