Jaguar Land Rover (JLR) “failed to finalise” a cyber insurance deal before it was struck by hackers last month, forcing a halt to production and threatening the future of its supply chain, according to an industry journal.
The Insurer, citing three insurance sector sources, said Britain’s biggest carmaker was still in negotiations over cover before the cyber attack at the end of August.
It opens the prospect that the company faces footing the bill for the hacking by itself.
Losses will easily run into many hundreds of millions of pounds, with its global factory shutdown set to last for a month at least.
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JLR shutdown extended
Marks and Spencer, which was targeted back in April, said it expected that the estimated £300m bill it was facing from the disruption would be largely offset by the cyber insurance cover it had taken out.
As frantic efforts continue at JLR to recover its systems, the government is exploring ways to support JLR’s supply chain and the 200,000 jobs within it.
One idea under consideration, according to ITV News, was taxpayer money being used to purchase parts.
These components could then be sold back to JLR as its manufacturing operations got back up to speed, resulting in no direct losses for the public purse.
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Inside factory affected by Jaguar Land Rover shutdown
The “just-in-time” nature of automotive production means that many suppliers had little choice but to shut down immediately after JLR announced its manufacturing freeze.
Industry sources estimate that around 25% of suppliers have already taken steps to pause production and lay off workers, many of them by “banking hours” they will have to work in future.
Union demands for a COVID-style furlough scheme have not been taken up by ministers, who have said that support to date has come only from JLR.
Industry minister Chris McDonald said on a visit to a West Midlands manufacturer on Tuesday he was “supremely confident” that JLR would get through the cyber attack.
He added: “What I really want this to be is a wake-up call to British industry. I’m affronted by this attack on British industry. This is a serious attack on a flagship of British industry.”
Jaguar Land Rover said it declined to comment on commercial matters when asked about its insurance cover.
The government has also been approached for comment.
