Securing Coverage: How Cybersecurity Measures Impact Your Insurance

In the distribution industry, uptime isn’t a luxury; it’s a necessity. From warehouse automation to connected inventory systems, every second counts. But as technology advances, so do the risks, and many distributors are learning the hard way that cyber insurance doesn’t always cover what they think it does.

In our upcoming Cyber Insurance Readiness Webinar, we explore how your answers on cyber insurance applications can directly impact claim approvals, policy premiums, and even your operational continuity. Here’s what every distribution business needs to know.

The Stakes Are High for Distributors

Cyberattacks can cripple warehouse operations, delay shipments, and compromise vendor or customer data. And yet, many distributors unknowingly jeopardize their cyber insurance coverage by misrepresenting their network security posture.

For example, saying “yes” to having backup and recovery procedures in place means more than backing up data once a month. In the Distribution Industry, this should include automated and encrypted backups of key operational systems, such as order processing, inventory management, and ERP platforms, with tested restoration protocols to minimize downtime during ransomware or system failure.

Common Weak Spots in the Distribution Industry

Here are the five most common areas where distributors fall short, yet still check “yes” on insurance forms:

• Intrusion Detection Systems (IDS):
  Many distributors lack real-time monitoring or alerts, meaning breaches can go undetected for days. Insurers expect IDS to be active, monitored, and regularly updated.
• Intrusion Prevention Systems (IPS):
  Detecting threats is not enough. Without IPS, malicious activity could pass through firewall rules and disrupt warehouse systems before it’s caught.
• Multi-Factor Authentication (MFA):
  MFA must be enforced not just within the IT staff but also for anyone with access to remote warehouse systems, order processing tools, or admin-level applications.
• Patch Management:
  Outdated software on warehouse floor equipment or mobile scanning devices creates easy entry points for attackers. Insurers are looking for automated patching within 30 days, especially for critical infrastructure.
• Backup and Recovery:
  Distributors often rely on outdated backups or fail to test restoration regularly. A false sense of security here can lead to denied claims and prolonged operational disruption.

Real-World Impact: One Misstep, Big Consequences

During the webinar, we will share how a distributor reported full MFA coverage but had only deployed it for the finance team. A phishing attack targeting their warehouse management system led to data theft and significant delivery delays. Their claim was denied due to misrepresentation.

One Wrong Answer Could Cost You Coverage – Stay protected and insurable.

• Audit your cyber insurance responses for accuracy, especially around operational systems.
• Conduct a distribution-specific security gap assessment.
• Document your backup, recovery, and patch management practices to align with what insurers expect.
• Partner with experts who understand both cybersecurity and distribution environments.

How Aktion Helps Distribution Companies

At Aktion, we specialize in supporting the security needs of ERP-driven distributors. Our cybersecurity risk management services include:

• IDS/IPS deployment and monitoring
• MFA configuration for remote and warehouse access
• Automated patching across devices and systems
• Cloud-based backup with tested recovery

Get Ahead of What You Need to be Prepared:
Join our webinar “Understanding the Questions On Cyber Insurance Forms” – June 18 @ 12:00 pm ET – Register Today

And

Schedule a security consultation with Aktion to strengthen your defenses and protect your coverage. Schedule My Review