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The Jaguar Land Rover cyberattack exposed urgent supply chain weaknesses. Orders to hundreds of small suppliers vanished within days. Cash flow threats hit immediately. That incident now shapes how insurers address cyber insurance coverage for small and mid-sized businesses, prompting a shift in how risk is evaluated for these companies.
“The cyber attack suffered by Jaguar Land Rover demonstrated acute vulnerability in the supply chain because of dependence on one major customer whose business has effectively been shut down by cyber criminals,” said CFC’s Head of Global Cyber Underwriting, Scott Bailey.
CFC has introduced a customer business interruption extension to its Cyber Proactive Response policy for small and mid-sized businesses. This new coverage protects against losses caused by a customer’s cyber incident.
New Cyber Insurance Coverage Responds to Customer Disruption
Customer business interruption insurance helps when a major customer cancels orders because of a cyberattack. It covers the resulting loss of revenue for the affected business.
Scott Bailey said the Jaguar Land Rover attack showed how reliance on one customer creates concentrated risk. He said many suppliers could not operate normally after orders stopped. “Whilst unable to operate its own business as normal during the attack and recovery period, JLR was forced to cancel orders with its hundreds of suppliers, decimating the short-term fortunes of many of its small business providers,” said Bailey.
Jaguar Land Rover had to shut down its systems while recovering from the attack, which led to many order cancellations. As a result, many small and mid-sized businesses quickly faced financial difficulties.
Filling a Long-Standing Insurance Gap
Bailey pointed out that while cyber insurers have covered direct attacks for a long time, there is still a gap in protection for urgent indirect losses caused by customer outages.
The new extension aims to close that gap. It covers SMEs when customers’ cyber failures cause losses.
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Availability and Target Markets
The extension is available globally by endorsement. Brokers can add it to CFC’s flagship SME cyber policy. Manufacturing and wholesale businesses are most at risk, but this coverage is available to companies in all industries and regions.
Bailey warned that abrupt order loss can endanger survival. Short-term revenue hits often prove fatal.
Broader Shift in Cyber Insurance Coverage
This new coverage marks an important change in cyber insurance. Insurers are now addressing the indirect effects on the supply chain, not just direct cyberattacks. The extension fights a severe protection gap: many SMEs remain uninsured, raising their vulnerability in a cyber crisis.
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