What Happens if China Hacks the US Water Supply? I Went to a Secret War Game to Find Out
Insurers play out a simulated cyberattack on US water utilities by China's Volt Typhoon.
A war game simulation involving insurance executives explored the catastrophic consequences of a cyberattack by China's Volt Typhoon on US water utilities. The simulation highlighted severe second-order effects, including hospital evacuations, food supply chain disruptions, and potential physical destruction, leading to difficult decisions for insurers regarding resource allocation and liability under 'act of war' clauses.
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The lesson from this incident
Full lessonThe war game simulation revealed that a sophisticated nation-state attack on US water utilities could trigger cascading second-order failures far beyond the initial target, including hospital evacuations and food supply chain collapse. Critical infrastructure systems like water utilities often operate with aging operational technology (OT) that lacks modern security controls, creating exploitable gaps for adversaries like Volt Typhoon. The 'act of war' ambiguity further complicates response and recovery, leaving insurers, governments, and operators without clear playbooks. This matters because unpreparedness at the planning and policy level translates directly into delayed, disorganized responses during real-world events, magnifying harm to civilians.
What helps against this
How we list vendors- Endpoint detection and response (EDR and XDR)
Malware and hands-on-keyboard attackers on laptops and servers get spotted and stopped.
- Network segmentation and microsegmentation
One compromised machine can no longer reach everything else.
- OT and industrial control system security
Factory, building and utility control systems get visibility and protection.