In late 2014, the German Federal Office for Information Security (BSI) released a report detailing a disruptive cyber hack at an unnamed steel mill facility. The attack—which was deployed through a combination of social engineering tactics and malware— compromised several of the steel mill’s industrial control components. From there, equipment breakdowns and production outages ensued, resulting in extensive property destruction.

This attack has become known as one of the first cyber incidents to result in significant physical damage—demonstrating the wide-spread losses that such incidents can cause. In hindsight, there are various cybersecurity lessons that organizations can learn by reviewing the details of this incident, its impact and the mistakes the facility made along the way. Here’s what your organization needs to know.

steel mill cyber hack

The Details of the Steel Mill Cyber Attack

The BSI’s 2014 report explained that a large-scale cyberattack occurred at an undisclosed steel mill facility in Germany earlier that year. The attack initially stemmed from cybercriminals using a range of social engineering techniques—namely, spear-phishing emails—to manipulate some of the facility’s employees into exposing their security credentials. By impersonating a trusted source within the facility, the cybercriminals successfully tricked multiple employees into viewing fraudulent emails. Opening the emails triggered the launch of a malware program that extracted the employees’ usernames and passwords.

The cybercriminals then gained access to cyber hack the steel mill facility’s office network and production systems using these stolen credentials. Once the cybercriminals infiltrated the facility’s operational technology, they began targeting specific industrial control components and interfering with the functions of certain machinery and equipment—thus contributing to production failures. In particular, a blast furnace at the facility was unable to be shut down properly. These incorrect shutdown protocols proved detrimental to the furnace, causing substantial physical damage at the facility.

The perpetrators of this incident remain at large, and their true motivation for the attack is still unknown. However, the BSI’s report confirmed that these cyber- criminals possessed an abundance of technical knowledge—both in the realm of traditional IT systems and the steel mill facility’s specialized, industry-specific technology. As such, cybersecurity experts have proposed that the perpetrators may have previously worked within the steel industry or belonged to an advanced group of cybercriminals.

The Impact of the Steel Mill Cyber Attack

Because the name of the steel mill facility and specific information regarding their operations were never shared, the full impact of this cyberattack is undetermined.

Nevertheless, the facility likely faced the following consequences from the incident.

Physical destruction
The BSI’s report explained that the improper shutdown of the blast furnace led to “massive” property damage at the steel mill facility. Fortunately, no employees or members of the public were injured by this incident. Yet, given the fact that a blast furnace usually holds molten metal heated to extreme temperatures, it can be deduced that any malfunction or breakdown of this equipment contributed to severe physical destruction—impacting both the furnace itself and any property nearby. Affected property could include additional machinery, equipment and structural elements of the facility (e.g., walls, floors and piping).

Recovery expenses
As a result of physical damage from the cyberattack, the steel mill facility undoubtedly encountered substantial recovery expenses. Although the complete list of facility components, specialized equipment and production systems that were impacted by the incident is unclear, the cost of repairing a blast furnace alone is typically millions of dollars—enough to wreak financial havoc on any organization.

Significant disruptions
Apart from physical destruction, cybercriminals interfering with the steel mill facility’s operational technology and causing subsequent outages undoubtedly led to large-scale disruptions. After all, the facility essentially lost control of its production operations throughout the attack. Even after the attack concluded, the facility likely experienced delays in the process of recovering compromised components and attempting to resume normal operations.

Lessons Learned from the Steel Mill Cyber Attack

There are several cybersecurity takeaways from the attack at the steel mill facility. Specifically, the incident emphasized these critical lessons:

Employees are a key line of defense.
If the steel mill facility’s staff had known not to open the cybercriminals’ malicious emails, this incident likely could have been prevented altogether. With this in mind, it’s vital for all employees to receive sufficient workplace cybersecurity training. Knowing how to detect and respond to potential cyber threats—such as phishing scams—can help employees stop cybercriminals in their tracks. Specifically, employees should be educated on these security best practices:

  • Avoid opening or responding to emails from unfamiliar individuals or organizations. If an email claims to be from a trusted source, verify their identity by double-checking the address.
  • Never click on suspicious links or pop-ups—whether they’re in an email or on a website. Don’t download attachments or software programs from unknown sources or locations.
  • Utilize unique, complicated passwords for all workplace accounts. Never share credentials or other sensitive information online.
  • Only browse safe and secure websites on workplace devices. Refrain from using these devices for personal browsing.

Contact a supervisor or the IT department if suspicious activity arises.

Effective security software is critical.
In addition to employee training, a wide range of security software could have helped the steel mill facility detect, mitigate and potentially prevent this attack. Although this software may seem like an expensive investment, it’s well worth it to avoid devastating cyber incidents. Necessary security software to consider includes network monitoring systems, antivirus programs, endpoint detection products and patch management tools. This software should be utilized on all workplace technology components and updated regularly to ensure effectiveness. Also, it’s valuable to conduct routine penetration testing to determine whether this software possesses any security gaps or ongoing vulnerabilities. If such testing reveals any problems, these issues should be addressed immediately.

Physical exposures must be considered.
Prior to this steel mill cyber hack, it’s safe to say that most organizations didn’t include physical exposures within their cyber risk assessments. But, this attack showcased that such liabilities shouldn’t be ignored. It’s critical to consider whether any physical elements of your organization’s operations could be vulnerable when evaluating its cyber-risks, and introduce effective loss control measures to minimize these concerns. Further, the potential for physical damages should be carefully reviewed when your organization outlines various attack scenarios and mitigation protocols in its cyber incident response plan. It’s best to map out how workplace technology is connected to physical processes or components within the organization in order to detect these exposures.

Proper coverage can offer the ultimate protection.
Finally, this attack made it clear that no organization is immune to cyber-related losses—both digital and physical. That’s why it’s crucial to ensure adequate protection against all forms of cyber-related losses by securing proper coverage. Make sure your organization works with a trusted insurance professional when navigating these coverage decisions.

We can help.

In the unfortunate event that your business falls victim to a cyber attack, of any type, we can help you recover.

Cyber & Data Breach Liability coverages are developing on a daily basis as new threats emerge and new insurance companies enter the market.

Regardless of the type of business, one thing is certain, if you’re a business in operation today, you face cyber risks. Which means, you need to thoroughly understand your risk of a loss, how you would respond if a loss did occur, and whether Cyber & Data Breach Liability coverage makes sense for you.

The level of coverage your business needs is based on your individual operations and can vary depending on your range of exposure. It’s important to work with an Insurance Advisor that can identify your areas of risk, and customize a policy to fit your unique situation.

If you’d like additional information and resources, we’re here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk. You can download a free copy of our eBook, or if you’re ready make Cyber Liability Insurance a part of your insurance portfolio, Request a Proposal and we’ll get to work for you.

Tom Simon

Tom Simon

Chairman of the Board

Tom has worked in the insurance industry since 1977 holding numerous positions from Account Executive and Agency Manager, President to his current role. He combines his unique ability of thinking differently with his wealth of insurance and business experience to propel CoverLink to new levels of success.

In his spare time, he enjoys spending time with his family, especially his grandkids. In addition, he’s also an avid woodsman… yes, you read that correctly. He can often be found yelling “timber” or just splitting firewood for family and friends.

 

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Matt Simon

President

Prior to joining the team at CoverLink in 2006, Matt worked as an Underwriter with a multi-state insurance company located in Columbus, Ohio. Matt is a Certified Insurance Counselor (CIC) and Chartered Property and Casualty Underwriter (CPCU), having successfully completed the rigorous coursework and exams to earn these designations.

He also serves on the Board of Directors for the Ohio Insurance Agents Association and the Associated Risk Managers of Ohio, in addition to volunteering his time to multiple other community and industry organizations.

In 2013, Matt was awarded and recognized as the National Young Insurance Agent of the Year, and in 2019 he was recognized as the Insurance Advisor of the year by Finance Monthly.

 

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Gina Loehr

Gina Loehr

Senior Account Manager

Gina oversees the Commercial Lines division at CoverLink, which is responsible for managing the business insurance needs for clients.

She has worked in the insurance industry since 1980, beginning as a Commercial Underwriter with a regional company located in Springfield, Ohio.

In 1984, she earned her Certificate in General Insurance, and in 1995, her Accredited Advisor of Insurance designation.

In her spare time, she enjoys spending time with her family, including four grandkids, and biking.

 

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Kyle Carper

Account Manager

Kyle joined the CoverLink team in 2018 as in intern when he was a junior in high school. Shortly after, he began studying to obtain his insurance license, which he passed in 2020 and joined our Personal Lines division.

Kyle helps individuals and families with their home, auto, umbrella and other personal insurance needs, which he thoroughly enjoys.

In his spare time, he enjoys spending time with the ones he loves, watching sports and playing video games.

 

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Tim O’Rielley

Senior Insurance Advisor

Tim works with individuals, families and businesses to design insurance policies perfectly suited to their specific needs.

He has been working in the insurance industry, and with CoverLink, since 1993. As a lifelong resident of Logan County, he’s been involved with a number of community organizations, often taking the leadership role such as President of the Chamber of Commerce, and the United Way.

He’s often found spending as much time as possible with his two daughters, and his grandkids

 

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Mark Osborne

Account Executive

Mark has worked at CoverLink since 2004. He specializes in life and health insurance, where he utilizes his extensive knowledge to help clients make sense of a confusing and ever changing market.

He also holds the Property & Casualty Insurance License, and often helps families as well as small businesses to set up their insurance protection plan.

Mark graciously volunteers his time to several community organizations, and enjoys spending his free time with his family

 

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Leah Loehr

Account Manager

Leah joined the Commercial Lines division at CoverLink in 2012 where she works closely with business owners on their Commercial Insurance needs to help them achieve their desired level of protection.

Leah is known for her outgoing personality, positive attitude, and relentless pursuit of the goals she sets out to achieve. Clients often rave about her and the service she provides.

In her spare time, Leah enjoys spending time with her family and friends… and she can often be found at the closest Buffalo Wild Wings!

 

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Larry Middaugh

Larry Middaugh, PLCS

Senior Insurance Advisor

Larry joined CoverLink with an extensive background in sales, bringing over 30 years of experience and commitment to taking care of his clients in the banking and mortgage industry.

Larry’s dedication to his clients aligned so well with the CoverLink tradition of relentlessly caring for, and protecting its clients, that he joined the team of Licensed Insurance Advisors in 2015.

Those in need of Personal or Business Insurance are delighted after working with Larry.

Larry defines success as knowing his purpose in life, continuing to grow to reach his fullest potential and sowing seeds that benefit others. He’s a father of three incredible children and husband to an amazing, kind and loving wife.

 

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Tony Fink

Tony Fink, CIC, CLCS

Insurance Advisor

Tony is responsible for serving the needs of individuals and businesses looking for property & casualty insurance. In addition, he’s licensed and capable of advising clients that desire life insurance protection.

He’s a Certified Insurance Counselor (CIC) and a Commercial Lines Coverage Specialist (CLCS), having successfully completed the rigorous coursework and exams to earn these designations.

Tony entered the insurance industry in 2008 bringing a diverse background of experience and knowledge to his Account Executive position with CoverLink.

In his free time, Tony enjoys spending time with his family, being outdoors, following sports and listening to music.

 

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Meg Barton

Meg Barton

Senior Account Manager

Meg works in the Commercial Lines division at CoverLink as an Account Manager, where she helps businesses with their varying & complex insurance needs, from Business Auto to Commercial Liability, Directors & Officers to Commercial Property.

Meg earned her Bachelor’s degree in Business Management from Urbana University in Ohio. She has been active in the insurance industry since 2006, and is an Ohio Notary.

In her spare time, Meg enjoys spending time with her family at Indian Lake, listening to live music and reading.

 

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Jordan Springs

Jordan Springs

Account Manager

Jordan joined the CoverLink team in 2017, bringing top-notch client service skills acquired through several years in the banking industry.

She’s constantly assisting and advising clients on their personal insurance needs – home, auto, jewelry, umbrella and other policies – not to mention, she’s just plain fun to be around!

In her spare time, Jordan enjoys spending time with family and friends, especially her husband and two kids.

 

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Jill Rawlins

Jill Rawlins

Account Manager

Jill works in the Personal Lines Department where she helps individuals and families with their Home, Auto, Umbrella and other personal insurance needs.

She graduated with her Bachelor’s Degree in 2009 from Otterbein University, and shortly after began her career in the insurance industry.

In addition to holding the Ohio Property & Casualty Insurance License, she also has her Accident & Health, Life and Variable licenses.

Jill enjoys spending as much time as she can with her family, and especially enjoys being with her little girl who makes her laugh often.

 

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Chris Badenhop

Chris Badenhop

Insurance Advisor

Chris joined the CoverLink team in 2017 with a diverse and exciting professional and educational background. He works with individuals, families and businesses to find the ideal solution for their insurance needs.

He brings a positive attitude and a desire to help his clients in his position as an Insurance Advisor, but most importantly, he shares one of the most fundamental beliefs we hold dear within our organization: he cares. He cares about his clients, he cares about protecting all that’s important to them, and above all, he cares about doing what’s in the best interest of his clients. His enthusiasm and empathy set him apart, and he’s backed by the top-notch service provided at CoverLink, making him a tremendous asset to his clients. In short, Chris puts people before policies.

In his free time Chris enjoys spending time in the outdoors hunting and fishing. He’s also a passionate sports fan devoting support to all levels of play.

 

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Joe Cooney

Joe Cooney

Senior Insurance Advisor

When considering business insurance, contracts and requirements are often complex and confusing. As professional insurance agents, CoverLink is in a position to help. We’ll help you secure the right business insurance at the right price so you can enjoy the security and peace-of-mind you deserve, and spend time focusing on your business and not your insurance.

 

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Kelli Young

Kelli Young

Director of Marketing

Kelli brings extensive marketing expertise to CoverLink after spending nine years in the automotive industry, where she gained valuable insight in the areas of design, digital presence, and content creation.

After joining CoverLink in 2015, her focus has been on telling the story of our long standing belief, that people are more important than policies, in a fresh way with a digital twist, allowing consumers who believe what we believe to find us easier.

Kelli graduated from Ohio University in 2006 with a Bachelor’s Degree in Communications, and earned her Master’s Degree in Business from Ashland University in 2010.

She enjoys spending time with her family, especially being outside with her son and two daughters.

 

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Jami Radern

Jami Rader

Director of First Impressions

As the Director of First Impressions, Jami brings top-notch client service skills. She’s constantly assisting clients with billing inquiries, working to resolve any frustrating issues they’re having, and she’s just plain fun to be around!

In her spare time, Jami enjoys spending time with family, especially her husband and four children and going on four-wheeling trips together.

Erika Asher

Account Manager

Erika works in the Commercial Lines division at CoverLink as an Account Manager, where she helps businesses with their varying & complex insurance needs, from Business Auto to Commercial Liability, Directors & Officers to Commercial Property.

In her spare time, Erika enjoys hiking, reading, and spending time with her son.

 

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Erin Whitaker

Account Manager

Erin joined the Personal Lines division at CoverLink in 2019, as an Account Manager, where she helps individuals and families with their Home, Auto, Umbrella and other personal insurance.

She previously worked in the healthcare industry before getting her insurance license in November of 2018.

When Erin isn’t at work, you can find her cheering on her kids at various sporting events almost every day of the week. In addition, she enjoys planting flowers, finding rusty items to decorate with and spending as much time with her family as possible.

Alissa Grim

Alissa Grim

Account Manager

Alissa works as an Account Manager where she helps individuals and families find the insurance that best fits their needs.

In addition to earning her Ohio Property & Casualty Insurance license in 2008, Alissa received her Life Insurance License in 2010.

In her spare time, Alissa enjoys spending time with her family camping, and watching her son race go karts around the U.S.

Vickie Allen

Vickie Allen

Account Manager

Vickie has worked at CoverLink since 2000 helping clients with a diverse set of needs, from securing the coverage that’s best for their individual situation, to providing guidance when claims or billing questions arise.

Vickie currently holds the Ohio Property & Casualty Insurance License, and is well known to clients because of her infectious personality and radiant smile that greets them when visiting the office.

In her spare time she enjoys spending time with family and friends, and traveling.

Randy Leopard

Randy Leopard

Vice President

Randy began his insurance career in 2000 working with both personal and business clients on their health insurance needs.  In 2008, he expanded his area of focus to include all types of insurance his clients needed from home & auto insurance, business insurance and farm insurance.

Randy resides in Urbana where he enjoys spending time with his family, and watching his horses race from time to time.

Melodi Wilkins

Melodi Wilkins

Senior Account Manager

Melodi has called CoverLink her ‘work home’ since 2009.  In her position as a Senior Account Manager, she works closely with clients needing home, condo, renters, auto, umbrella and other types of personal insurance coverage. Melodi also provides service and assistance to businesses regarding their insurance protection needs.

In her spare time, Melodi enjoys being outside and spending time with her family, especially with her granddaughter.

Morgan Edwards

Morgan Edwards

Account Manager

Morgan joined the CoverLink family in 2019, as an Account Manager. She helps her clients with personal insurance needs such as, home, condo, renters, auto umbrella and more. In addition, she works closely with business owners on their Commercial Insurance needs to help them achieve their desired level of protection.

In her spare time, Morgan enjoys spending time with her family and friends, making memories and enjoying all that life has to offer!

Sam Ankrom

Insurance Advisor

Sam joined the Coverlink team in 2020 with a strong passion and drive to help people. As an insurance Advisor with his Property & Casualty license, he assists individuals and business with all of their insurance needs.

He is dedicated to going above and beyond for his clients and wants to make sure every client is not only properly insured, but can also feel like a part of the Coverlink family. Sam is committed to helping everyone feel confident and comfortable with their insurance decisions and have the peace of mind knowing they are taken care of by not only himself, but by the entire Coverlink team.

Outside of work you can usually find Sam spending time with friends and family, or outside on the golf course.