Jaguar Land Rover’s Cyberattack – A Potential Game-Changer

A Potential Game-Changer for Contingent Business Interruption (CBI) Insurance in Manufacturing and Beyond

Jaguar Land Rover (JLR) recently announced that its production freeze, following a significant cyberattack on its global systems, could extend to three weeks. This incident is set to have a substantial impact, not only on the automaker’s balance sheet through lost revenue but also creating a ripple effect far beyond its assembly lines, affecting its network of suppliers and showrooms.

If JLR holds comprehensive cyber insurance, this incident could activate coverage for incident response costs and for the daily net income lost during the system downtime. Based on current estimates, their revenue losses could reach GBP 120 million – a figure that the cyber insurance market is equipped to absorb.

It’s crucial to remember that any insurance payout would be adjusted for other contributing factors that may have already impacted income. For example, JLR had already reported a significant 49% drop in profits to £351 million in the quarter ending June 30, 2025, largely due to US tariffs on UK-made cars and weaker global sales as older Jaguar models were phased out.  Insurance payouts depend upon accurately assigning portions of a loss to each cause or policy, since losses rarely occur in isolation and always involve multiple contributing factors.

However, press reports have suggested that the total revenue loss for JLR and its wider network of suppliers could potentially reach GBP 1 billion. This presents a truly interesting and complex challenge for the cyber insurance landscape.

Could supplier loss of income be covered under a cyber insurance policy?

Cyber insurance is the asset of the policyholder.  It covers only the policyholder’s own losses – including direct business interruption (BI), contingent business interruption (CBI), amongst other costs resulting from a covered event.

Let’s clarify what BI typically covers in cyber insurance – it has two parts: Direct Loss (BI) and Contingent BI (CBI).  In either case, the

• BI typically responds to the policyholder’s own losses when their operations are disrupted – e.g., lost income because systems are unavailable due to a cyber incident.
• CBI typically responds to the policyholder’s own losses that occur when a supplier experiences a disruption that then affects the policyholder’s revenue – e.g., lost income because a supplier’s system is unavailable and they are unable to provide services to the policyholder. 

Typically, the providers covered are Information Technology Service Providers (IT providers), however coverage can be expanded to include non-IT providers on request.

In the JLR scenario, the cyberattack targeted JLR’s own systems – not those within their supply chain.  Their theoretical policy would respond under the BI section for JLR’s losses. 

Partners in the supply chain would need to rely on their own insurance or contractual arrangements for potential indemnity of the losses they’ve suffered.  This could be a CBI event for insureds to whom JLR is acting as the supplier – for example, to a car dealership or an auto repair shop – who’s coverage could be triggered for their loss of income resulting from JLR’s inability to supply vehicles or parts.

In this way, CBI addresses upstream impacts to a supply chain because of a cyber incident at the supplier; meaning it responds when a supplier can’t deliver a key part, the next company in the chain can’t finish its product, which reduces their revenue. The insurance responds to the policyholder’s loss of income because of a supply-side cyber incident.

This JLR event highlights a different challenge, downstream impacts: many suppliers are suffering loss of revenue because they have lost a customer because of a cyber incident at the customer. At present there are limited options in the cyber insurance market to secure coverage that responds to the policyholder’s loss of income because of a demand-side cyber incident. Underwriting this exposure is challenging, the insurers are only authorized to underwrite the risk management and security controls of their policyholder and not the third party.

So, what next?

For many suppliers, JLR is their primary customer, and this disruption could unfortunately lead to financial distress or even bankruptcy.  Unite, the largest trade union in the UK and Ireland, has already reported members facing layoffs with “reduced or zero pay.”

The severity of the situation has prompted Members of Parliament to consider taxpayer bailouts, with one MP suggesting that thousands of layoffs could result. If a bailout becomes necessary, it raises important questions: Would it be a corporate bailout for JLR, or a support scheme for workers? 

We have certainly seen taxpayer bailouts for corporations before; there are historical examples such as AIG in 2008 (who received a bailout during the U.S. subprime mortgage crisis) versus Lehman Brothers (who did not). Interestingly, JLR itself was offered a bailout in 2020 but declined the UK Government’s terms, which included the UK taking an ownership stake.

We have also seen taxpayer funded worker furlough programs offered when potential layoffs that would disrupt the broader economy as during the Covid-era and more recently with U.K. Bus manufacturer Alexander Dennis.  

As a case study, this event serves as a reference point to illustrate how susceptible the economy is to inherent risk in our increasingly connected supply chains, as well as for appreciating the role and importance of cyber insurance – the most recent ‘poster child’, so to speak, for the challenges and lessons that modern organisations face in managing digital and operational risk.

Comprehensive insurance review

At Price Forbes, we’re committed to helping clients develop cyber insurance strategies that match the complexity of the threats they face, so when the next breach hits, they’re not just protected, they’re resilient. Contact our specialist team today for a comprehensive review of your cyber insurance strategy.

Disclaimer

The analysis presented in this article is purely theoretical and based on our interpretation of publicly reported news concerning the Jaguar Land Rover cyberattack. Price Forbes is not involved in Jaguar Land Rover’s insurance arrangements and therefore possesses no confidential information about any policies they may or may not have in place. This content is intended for general informational purposes and should not be considered as specific advice or a definitive statement on any actual insurance coverage.

Lyndsey Bauer

Managing Director, Cyber
Price Forbes
Lyndsey.Bauer@Priceforbes.com