Hacker Insurance for Ecommerce Businesses
Cybercrime or breaches of computer security cost US businesses a whopping $150 million in lost revenue each year. This includes information theft, data or network sabotage, system penetration by outsiders, abuse of Internet access, spoofing, viruses, financial fraud, active wiretapping, access unauthorized insider and theft of laptops, etc. These hackers can be hobbyists simply motivated by the challenge of cracking a system, outside professionals hacking to illicitly obtain company information, or an employee hacker. Despite firewalls, computer security is inadequate against hackers.
Why it is necessary to hack the insurance:
Due to increased hacking activity and flawed security, businesses incur extensive financial and network damage. It becomes very important to take an insurance policy that specifically covers damage against hackers or protects the e-commerce business.
Disadvantages of existing insurance plans:
Traditional insurance policies are inadequate against most aspects of computer crime damage. Your coverage is based on physical assets, not information assets. They are rarely able to define cyber risk coverage and even if they do, the security breach is excluded. Intellectual property infringement, Internet content and advertising crimes, employee dishonesty, and computer fraud are all “Greek” terms for traditional insurance companies. They do not recognize the monetary loss, reduction or closure of businesses due to cybercrime by hackers.
Advantages of Hacking Insurance:
Most insurance companies have come to an agreement to recognize the impact of technology on business in today’s circumstances. They have become more sensitive to the risks of online business or e-commerce and cover them appropriately.
Since the year 2000, some companies such as Lloyd’s of London, Zurich Insurance Group and Chubb Insurance Group are starting to cover cyber security gaps. American International Group’s NetAdvantage program addresses a wide range of e-commerce crimes including cyber extortion, content defamation, copyright and trademark infringement, viruses, theft, destruction or alteration of data. They offer rewards for stopping hackers and refunds for post-hack crisis management. Many specialty insurers have taken the lead in offering e-commerce protection packages. INSUREtrust.com, Hamilton, Ace Ltd information technology products, Okemos, Website Insurance & Security Program are some of the recent entrants in this field.
The main advantages are that some criminal behind the keyboard cannot destroy your business. Information gives companies a competitive advantage in the global economy. It can be disastrous for the company if information is destroyed or stolen or infected with viruses or disclosed to competitors. Many insurers have started to offer insurance products to protect the company from network breaches or virus attacks.
Chubb Corporation’s ‘Cyber Security’ Policy provides comprehensive coverage against electronic theft, fraudulent electronic communications, electronic vandalism, electronic threats and disruption of electronic services. Many cyber insurers are tackling difficult issues such as asymmetric information, adverse selection, and moral hazard and other risk domains to provide more comprehensive coverage and solutions.
Cyber insurance is a powerful weapon to improve Internet security. Cyber insurance products, now offered by insurance companies, address the needs of today’s e-businesses.
