Restaurants and Third-Party Cyber Risk

WHY THIS MATTERS

Online Food Delivery Services began to flourish long before the COVID-19 Pandemic. Now, restaurants trying to remain financially viable, are offering every type of food imaginable – delivered directly to your home.

Online ordering systems conveniently keep track of personally identifiable information (PII) such as names, phone numbers, home addresses, and credit card or payment card information (PCI).

Hackers and fraudsters are in search of valuable data, such as PII and PCI, and vulnerable targets with gaps in cybersecurity.

Unfortunately, restaurants working with online food delivery services face the challenge of third-party vendor cyber risk.

You are advised to prepare a checklist of best practices to protect your business.  

Consider a robust Stand-Alone Cyber Insurance policy as part of your cyber risk management plan.

Online Food Delivery Services

Online food deliveries began to flourish long before the COVID-19 Pandemic. Now, restaurants trying to remain financially viable, are offering every type of food imaginable – delivered directly to your home.

Although Online Food Delivery Services have helped to fill the need for food at home during stay-at-home orders, they were experiencing steady growth even before the crisis. Reports indicate:

• Revenue in the Online Food Delivery segment amounts to US$26,527m in 2020 (which may not account for shifts due to the COVID-19 Pandemic).
  
  
• Revenue is expected to show an annual growth rate of 5.1%, resulting in a market volume of US$32,325m by 2024.

Now, with many people working from home, there has been an uptick in grocery food deliveries, which means there has not been a dramatic surge in online food delivery from restaurants.

Third-Party Vendors

Restaurants are facing a tough decision when it comes to accommodating food deliveries, namely, develop their online channel or use a third-party delivery service? On the one hand, they are paying 15 to 30% fees for each third-party delivery. On the other hand, 70% of online consumers agreed that they would first order directly from the restaurant’s website to support them.

Is Third-Party Vendor Cyber Risk the Deciding Factor?

If you suffer a data breach, ransomware attack, or cyber-related business interruption, your business could face a large financial loss.

Online ordering systems conveniently keep track of personally identifiable information (PII) such as names, phone numbers, home addresses, and credit card or payment card information (PCI).

Hackers and fraudsters are in search of valuable data, such as PII and PCI, and vulnerable targets with gaps in cybersecurity. In fact, your third-party vendor may be the gateway for cyberthieves to enter your computer network.

Network Security Across All Devices

If you suffer a data breach, ransomware attack, or cyber-related business interruption, your business could face a large financial loss.

Online ordering systems conveniently keep track of personally identifiable information (PII) such as names, phone numbers, home addresses, and credit card or payment card information (PCI).

Hackers and fraudsters are in search of valuable data, such as PII and PCI, and vulnerable targets with gaps in cybersecurity. Your third-party vendor may be the gateway for cyberthieves to enter your computer network

Restaurants’ Cyber Loss Prevention Tips

Prepare a checklist of best practices to protect your business:

• Document risk management processes and controls
• Map your data and data flow in your network
• Identify critical functions that could be disrupted by a breach
• Know your legal obligations by working with legal counsel
• Inventory and monitor your cyber threats
• Assess your third-party vendor cyber risk
• Establish remote access protocols for third-party vendors
• Regularly manage each user’s access privileges to your network
• Frequently update passwords to your network
• Install physical and virtual firewalls and anti-virus software
• Review cloud-based proxy and firewall solutions
• Obtain the protection of Stand-Alone Cyber Insurance which provides support in creating the plans you need:
  • An Incident Response Plan
  • A Business Continuity Plan
  • A Disaster Recovery Plan

Keep in mind that even the best cybersecurity measures may not prevent a cyberattack one hundred percent of the time. That leaves you with residual cyber risk (e.g., Third-Party Vendor Cyber Risk or human error by someone from your team). The good news is that you can transfer that risk to a robust Stand-Alone Cyber Insurance policy that meets your cyber risk tolerance level.

TAKEAWAYS

• Cybersecurity measures are an essential part of your cyber risk management, but they may not protect you from Third-Party Vendor Cyber Risk.
• Transfer Residual Cyber Risk to Stand-Alone Cyber insurance.
• Cyber Insurance provides you with a safety net.
• Cyber Insurance helps protect your financial viability and bottom line.
  
  

Reach out to a specialist cyber broker, such as Cyber Armada Insurance, to request innovative and robust Stand-Alone Cyber Insurance solutions appropriate for your needs and cyber risk tolerance. We understand the evolving demands and expectations of cyber insurance clients.

Contact Cyber Armada today to examine how your company faces potential financial losses from a cyberattack. Contact us at 888.727.6232.

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