Article

The rise of spoilage as a cyber risk

Cyber risk can cause spoilage for cold-chain, retail and logistics businesses, damaging stock, disrupting operations and increasing disposal costs.

For years, cyber risk conversations have focused on breaches of network security and privacy liability, ransomware and cyber extortion, and supply chain disruption and business interruption. For retailers, food businesses, and other operators within cold-chain and supply/distribution logistics, cyber is increasingly capable of creating a far more tangible loss: spoilage. When systems that control refrigeration, inventory, logistics, or replenishment are disrupted, this can lead to the physical deterioration of stock, emergency disposal costs, lost sales, and operational chaos.

Recent incidents have brought this to the forefront of discussions within the cyber insurance market. On the evening of 11 October 2026, a cyberattack on several French supermarkets took place. Overnight, hackers remotely exploited vulnerabilities in the software that regulates the temperature of fridges and freezers, forcing temperatures to rise as high as 50ºC and above. In some supermarkets, the refrigerators caught fire or melted, with further damage then caused by automated fire sprinkler systems. The full impact of this event is being assessed, but it appears that about 400 supermarkets were affected, with huge amounts of stock discarded to avoid health risks.

Spoiled, discarded, and unusable stock was also a consequence of the cyberattacks on UK retailers in 2025. While the most visible aspects of this loss event were disruptions to online orders and payments, the operational knock-on effects were immediate: manual processing, an inability to distribute stock from warehouses, and, in some cases, higher levels of markdowns and product waste. These were not just peripheral consequences.

Retailers are particularly exposed, but not alone

Spoilage is a particularly acute form of cyber loss because it can happen quickly and irreversibly. Retailers — especially grocers and businesses with significant fresh, chilled, or frozen inventory — are particularly exposed to this type of cyber event due to their reliance on connected refrigeration systems, temperature-monitoring systems, and inventory systems, all of which can be disrupted by cyberattacks. The risk is operational, financial, and reputational. A cyber incident can reduce on-shelf stock availability, disrupt customer confidence, create waste, and damage margins in a business where profitability is already tightly managed.

Retailers are not the only industry potentially affected by spoilage losses caused by cyberattacks. Other potentially vulnerable industries include food production and agriculture, pharmaceuticals and biotech, and chemicals and specialty materials, to name but a few.

Not just a claims issue, but an underwriting issue

Within the current cyber market, there are two paths towards covering losses of perishable goods emanating from a cyber event — amending cyber physical damage and/or amending traditional cyber coverage (as a function of business interruption or potentially as a separate insuring clause).

Depending on an insured’s business and its operations, tailored language will need to be considered to ensure the definition of "spoilage" provides coverage to the extent required. It is important to note that "spoilage" usually refers to finished goods being destroyed due to changes in temperature/controlled environments that render such goods unusable.

In the current market, that definition can be amended to better fit a client’s needs, including finished goods past shelf-life expiry and goods in process/raw materials rendered unusable, all stemming from a defined cyber event. Coverage available can therefore differ depending on where the goods are in the process, from production to sale: namely whether they are raw materials, goods/work in progress, or finished goods.

The broader lesson for the market

The rise of spoilage as a cyber loss is a useful reminder that digital risk and physical risk continue to converge. Ensuring that the underwriting process considers this exposure and ensuring that policy definitions of spoilage and coverage are tailored to an insured's actual exposure are crucial.

To learn more about what coverage options may be available to your organisation, please contact your Marsh representative.

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Article

The rise of spoilage as a cyber risk

Retailers are particularly exposed, but not alone

Not just a claims issue, but an underwriting issue

The broader lesson for the market

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The rise of spoilage as a cyber risk

Retailers are particularly exposed, but not alone

Not just a claims issue, but an underwriting issue

The broader lesson for the market

Cyber Risk

Related insights

Why cyber tabletop exercises matter

Why Cyber Matters for Manufacturers

Risk in Context Podcast: Rethinking cybersecurity controls for an AI-driven world

Tailored for takeoff: Addressing airline cyber cover considerations