In today’s highly interconnected world, as I discussed back in 2015 at an Energy Bar Association conference, even the energy sector is at high risk for cyber attacks which requires cyber resilient systems. The recent ransomware attack that has forced the closure of the largest U.S. fuel pipeline is a significant example of how the U.S. critical infrastructure is at great risk of widespread outages that can impact the masses.
In recent years, the energy sector has opted to reduce costs and improve efficiency by enabling their industrial control systems (ICS) to embrace and connect to the internet which has significantly increased their cyber risk.
More than 80% of the country’s infrastructure is owned by the private sector. In addition, many machines that control pipelines are well past their prime and have few protections in place to prevent a sophisticated cyber attack such as the one that has impacted the Colonial Pipeline system which carries roughly 45% of gasoline and diesel fuel consumed on the East Coast.
While the Colonial Pipeline system ransomware attack may not have caused any damage to the infrastructure, it has forced the closure of the pipeline for an indefinite time and has the ability to create a surge in gas prices at the gas pump in the event the closure remains offline for five days or longer.
The attack could have been far worse. If it had impacted the pipeline’s ICS systems, it could have caused physical damage and a longer closure leading to supply shortages, with potential to impact the economy and inflation.
Cyber insurance would help the Colonial Pipeline system owner deal with the current challenges that they are currently faced with:
- Investigating the attack
- Understanding and resolving the issue
- Restoring service
- Incident response costs and other extra expenses
- Loss of earnings due to the closure
- Potential regulatory investigation costs and fines
Please reach out to us to get a cyber insurance quote for your energy organization or company, or for help with an upcoming cyber insurance policy renewal.