The problem – why generic cyber cover may fall short
Generic cyber policies are not always built with cannabis in mind. They may not fully reflect:
- The sensitivity of medical cannabis patient data.
- The operational dependency on automated cultivation and remote control systems.
- Regulatory expectations around data protection and privacy.
- The scale of potential revenue loss if key systems are down.
In addition, some businesses rely on partial cover under crime or professional liability policies, which were not designed to address cyber risk in a comprehensive way.
The solution – cannabis focused cyber and data privacy cover
A solid cyber and data privacy program for cannabis businesses should address three main dimensions.
Technical incident response:
• Immediate support from incident response specialists.
• Forensic investigation to understand what happened.
• System restoration and data recovery.
Privacy and regulatory consequences:
• Notification costs to patients and customers.
• Legal advice regarding regulatory obligations and communication.
• Defence against privacy related claims.
• In some cases, cover for administrative fines, where insurable and allowed by law.
Business and financial impact:
• Business interruption cover for loss of income during system outages.
• Extra expense cover to minimise the impact, such as temporary solutions or overtime.
• Cover for certain cyber crime events, such as ransomware, where included.
Example scenarios
- Breach of prescription database – An attacker gains unauthorised access to an online prescription and ordering system. Sensitive patient data is exfiltrated. The company must notify patients, work with regulators and handle media interest. Cyber cover funds notification, legal and crisis management costs.
- Ransomware in a smart greenhouse – A ransomware attack encrypts systems controlling climate, irrigation and lighting in a greenhouse facility. The company loses control over key parameters and the crop is at risk. The policy may respond to both the incident response and the resulting business interruption.
- POS system compromise – Point of sale and payment systems in a dispensary are compromised. Transactions cannot be processed for several days. Cyber cover can respond to lost income and the cost of restoring secure operations.
- Identity misuse – Attackers use stolen patient data to conduct fraudulent activities. The company faces claims from affected individuals. Cyber insurance supports defence and potential settlements, according to the policy.
