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Supply chain and operational disruptions from cyber-attacks may be a more severe potential threat to businesses than data and privacy exposures, according to a new report from Marsh.

In its latest risk management research briefing, Marsh notes that technology outages and software failures resulting in supply chain and operational disruptions can cause significant loss of income, increase operating expenses, and damage an organization’s reputation.

Marsh suggests businesses may be overlooking this threat and says the risk of an IT outage or software failure needs to be managed and addressed not just with insurance, but in a well-planned and effective risk management program.

The good news is that although cyber insurance policies have historically been triggered primarily by data breaches and hacking attacks, many now provide coverage for a broad range of technology failures and outages.

But Marsh adds that the purchase of cyber insurance should be just one part of a well-planned and effective risk management program that also includes policies and protocols to prevent and mitigate technology risks.

If unplanned, information technology (IT) outages are the most debilitating source of supply chain disruption, affecting 52 percent of companies responding to the Business Continuity Institute’s Supply Chain Resilience 2012 report.

In fact, IT outages outpaced all other sources of supply chain disruption, including severe weather events, transportation disruptions, and product contamination.

Business Insurance has more on the story.

Posted 6:14 PM

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