COVID-19 increases restaurants' need for cyber coverage

COVID-19 increases restaurants' need for cyber coverage | Insurance Business

COVID-19 increases restaurants

Many restaurants lack comprehensive cyber insurance coverage – just as the COVID-19 outbreak creates a host of new cybersecurity threats, according to Restaurant Guard Insurance.

With many restaurants switching to online ordering in response to the pandemic, the danger of cyber threats has increased.

“Insurance agents must ensure their clients’ new business models are protected, and in many cases may have to educate clients on the new exposures and dangers they could face when collecting sensitive customer data such as physical addresses, phone numbers, financial information and email addresses,” said Crystal Jacobs, vice president and program director at Restaurant Guard.

March alone posted a 600% increase in email phishing scams, according to Restaurant Guard.

“This pandemic is making it even more clear that every restaurant accepting online orders must protect its customers with a robust cybersecurity program and protect its own financial and legal interests with a cyber insurance policy,” Jacobs said.

For most restaurants, the minimum premium for a cyber insurance policy could be as little as $800 per year – cheaper than most restaurants’ weekly cost for food waste, according to Restaurant Guard. Policy costs may also reflect the level of cybersecurity already in place, so restaurants with strong firewalls and two-factor authentication logins may pay lower premiums than establishments that aren’t as prepared.

“What makes a good cyber insurance policy truly worth the investment is the response team that’s provided after a claim is filed,” Jacobs said. “It’s not simply an insurance agent going through the motions, but a full team of dedicated professionals from both the insurance provider and a digital security firm who root out hackers and breaches and help develop more secure internal processes to protect against future attacks.”

Both ransomware and phishing scams rely on human error and weaknesses in businesses’ cybersecurity protocols, Restaurant Guard said. With more sales being transacted online and more employees having access to data, the risks of cyber breaches are growing.

“Therefore, agents must be proactive and inform their restaurant clients of any new exposures or challenges that could result from changes in their business operations,” Jacobs said. “Whether it’s a local pizza shop or a celebrity chef steakhouse, every restaurant is vulnerable to digital intrusions and deserves proper information and protection from their trusted insurance agents and providers.”