Companies incorporate The Internet of Things at manufacturing plants, but at what risk?

The Internet of Things is coming to a manufacturing plant near you... if it hasn't already.

As reported by The Wall Street Journal on March 10, 2016, Robert Bosch GmbH recently announced steps it is taking to further utilize the Internet in its heavy manufacturing plants. Bosch will combine Germany’s industrial Internet standards with those of the Industrial Internet Consortium at its Homburg, Germany plant. Specifically, Bosch will incorporate IIC software to manage production and energy consumption at the plant.

This is another example of assembly lines, machines, and tooling in a variety of industries being connected to networks to increase efficiency and monitor machinery for preventive maintenance. So what happens if those networks get hacked?

The damage caused by such a breach could include not only the theft of employee personal information and a company's confidential business information and trade secrets, but now a hacker could invade a network and disrupt or take over an entire assembly line or factory. The results could be disastrous.

In 2014 hackers attacked a steel plant in Germany and accessed the company’s network. The attackers were able to shut down machines and caused damage to a furnace. Is your plant next?

What can you do?

Technologically, a company can implement the latest in network security and, if possible, keep tooling and machines on internal networks that are off the outside Internet.

Contractually, companies should protect themselves via terms and conditions and in supply agreements. Strong indemnity language can protect a company from disruptions from data breaches downstream, and limitations on liability can protect a company upstream with its customers.

Companies should also review their cyber-insurance coverage and ensure that proper internal procedures are in place in the event a breach occurs.