Getting Prepared for a Growing Risk Profile
Hurricane Florence was downgraded to a Category 1 hurricane before striking land on September 14, but that didn’t stop extreme flooding and pollution. While current estimates project that the storm will reduce economic growth by less than one percent this quarter, this does not lessen the impact of the loss and devastation for those in the Mid-Atlantic and Southeast.
Florence was a timely reminder that September is National Preparedness Month, the Federal Emergency Management Agency’s (FEMA) annual campaign to encourage and remind Americans to be prepared for disasters or emergencies in their homes, businesses, and communities. Ready.gov encourages individuals to make a plan, learn lifesaving skills, and stock emergency supplies. So what can manufacturing companies do to ensure that they are prepared for a disaster?
Planning is the key to business continuity, and it is crucial in the event of a natural disaster. If you are not sure where to begin, here are some simple ways to get started.
One of the most important elements of preparing your business for a disaster is safeguarding your company’s assets. The IRS recommends taking advantage of paperless record keeping, documenting valuables and business equipment, and checking on fiduciary bonds. If your business uses a payroll service, they should have a fiduciary bond in place to protect your company if the payroll provider defaults.
Whether it’s customer data or intellectual property, having appropriate backups in place can not only limit downtime and recovery needs but also reduce financial burdens of non-operational time. Cloud-based systems and data can allow for faster recovery and business continuity, but be sure to include these systems in your company’s disaster recovery plan.
Moving beyond what a historical natural or humanmade disaster looks like, cyberattacks and cyber warfare are now the third most likely event to cause disruption over the next five years. Lloyd’s City Risk Index in collaboration with Cambridge University projects that humanmade threats, including market crashes, cybercrime, and interstate conflicts, are a larger threat to economic output than natural disasters. The index estimates an annual impact of $320 billion in global GDP for humanmade risks and $226 billion for natural catastrophes.
Lloyd’s Chairman Bruce Carnegie-Brown noted to CNBC’s Squawk Box Europe, “There’s no doubt that cyber risk is escalating and when we last did this report three years ago it didn’t appear and it’s probably the fastest developing risk globally and I don’t think we yet fully understand the extent of that risk.”
Manufacturers should be particularly concerned, as manufacturing is consistently in the top five of most heavily-attacked industries each quarter from NTT Security’s Threat Intelligence Report (view the 2018 global report). A MAPI and Deloitte study in 2016 found that nearly 40% of surveyed manufacturing companies were affected by cyber incidents and that 38% of those impacted companies had breaches that resulted in damages more than $1 million.
Get prepared. To learn how to protect your company from cyber risk, join MAPI and manufacturing leaders at Advance Your Cybersecurity Program November 7 in Philadelphia.