Jack Kaminer
Business Insurance Advisor
In an industry focused on physical goods and mechanical precision, cybersecurity might not seem like a top concern. You might think, “We make things, not process payments—cyber threats aren’t our problem.” But that outdated view is precisely what puts manufacturers at risk.
Today’s manufacturing operations are more digital than ever. Automation, IoT devices, and cloud platforms now power everything from production to supply chain coordination. This change brings new vulnerabilities that many manufacturers haven’t fully considered.
Cyber is just one piece of the larger risk puzzle for manufacturers. If you want to understand the whole picture—from supply chain issues to workforce shortages—our new resource “Manufacturing Risk Report: A guide to the critical five” is a good place to start. Let’s look at why cybercrime needs more attention.
The new reality: Manufacturers are prime targets for cyberattacks
Manufacturing is the most-targeted industry for cyberattacks, and it’s easy to see why:
- High reliance on automation: When your machinery depends on data, even a brief disruption can stop production.
- Outdated systems and tight IT budgets: Many plants still operate with outdated software that can’t handle today’s digital threats.
- Low tolerance for downtime: Production interruptions cost time, money, and client trust, making manufacturers more likely to pay ransoms quickly.
- Widening digital footprint: As operations become more connected, a single vulnerability can ripple across multiple systems or business units.
The financial impact of these vulnerabilities is growing. In 2024, the industrial sector saw the largest year-over-year increase in average breach costs, with an additional $830,000 per incident. That’s on top of already high base costs. At the same time, it takes an average of 199 days to identify and another 73 days to contain a breach in an industrial organization. That’s nearly nine months of potential damage before the threat is fully resolved, which is longer than in most other industries.
Even with these risks, many manufacturers remain underprepared, relying on outdated assumptions that don’t align with today’s challenges.
The top four cyberattacks manufacturers should watch for
Each type of attack targets a different weak point in the manufacturing chain, including human error, outdated systems, insurance gaps, and misplaced trust. Understanding how these threats take shape is the first step in defending against them.
1. Social engineering and invoice manipulation
Cybercriminals impersonate trusted contacts, such as vendors, executives, or internal departments, to trick employees into wiring funds or sharing credentials. These scams often start with a convincing phishing email and take advantage of routine processes. For example, an accounts payable clerk at a precision parts manufacturer received what appeared to be a legitimate invoice from a long-term supplier, along with updated bank account details. A $240,000 payment was processed before anyone realized the email was fake.
Attacks like this exploit human error and weak verification processes, resulting in significant financial losses, reputational damage, and potential insurance coverage gaps if cyber and crime policies aren’t properly coordinated.
2. Ransomware and operational shutdown
Ransomware attacks lock down networks and halt production, often demanding large payments to restore access. In one instance, a regional metal parts manufacturer had its systems frozen by malware, causing robotic machinery to halt and disrupting operations across the facility. The five-day outage led to delayed shipments, missed service level agreements, and over $1 million in lost revenue. These attacks usually take advantage of outdated systems and poor segmentation, making recovery slow and costly.
3. Deepfake executive fraud
Attackers use AI-generated voice or video to convincingly mimic senior leaders, tricking employees into bypassing standard approval processes. One manufacturer fell victim when a finance manager received a call from someone who sounded just like the CEO, urgently authorizing a $100,000 wire transfer for a supposed acquisition. The transaction was completed before anyone realized the voice was fake. These incidents highlight the need for multi-layered verification, particularly for high-dollar transactions.
4. IP theft
Sensitive product designs, formulas, or proprietary manufacturing methods can be stolen through breaches and sold to competitors or leaked online. At one materials science company, a new composite formula was taken and posted on the dark web just weeks before a scheduled patent filing. The breach not only compromised a core innovation but also created legal and reputational fallout. These attacks often take advantage of weak internal controls around data storage, sharing, and access.
From risk awareness to resilience
Cyber threats don’t just affect the IT department. They hit operations, reputations, and revenue. As your production environment becomes smarter and more connected, your risk strategy needs to evolve.
Proactive cyber hygiene, coordinated insurance coverage, and ongoing employee training are just the starting points. Smart manufacturers are also reassessing how cyber exposure fits into their overall operational risk profile, alongside supply chain disruptions, labor challenges, technology changes, and compliance pressures.
You can explore all five critical risk categories in “Manufacturing Risk Report: A guide to the critical five.”
