Computer crimes or computer security breaches cost American companies a large $150 millions in lost revenues every year. This includes stealing of information, undermine of data or networks, system penetration by outsiders, abuse of net access, spoofing, computer viruses, business fraud, active wiretapping, unauthorized insider access and stealing of laptops, etc. These hackers could be amateurs simply actuated by challenge to crack a system, professional outsiders hacking to gain company information illicitly or an employee hacker. Despite firewalls, computer security is inadequate against hackers.
Why Hacking Insurance is Necessary:
Due to increased hacking activity and blemished security, companies receive high business and network indemnity. It becomes very important to take insurance specifically covering indemnity against hackers or protective e-commerce business.
Drawbacks of Existing Insurance Plans:
Traditional insurance policies are inadequate against most aspects of crime indemnity due to computers. Their coverage is supported physical assets, not information assets. They rarely can define cyber risk coverage and even if they do, the breach in security is excluded. Intellectual property infringement, content and advertising offences over the Internet, employee dishonesty and computer fraud are all 'Greek' terms for traditional insurance companies. They do not recognize business medium of exchange loss, reduction or fold due to computer crimes by hackers.
Advantages of Hacking Insurance:
Most insurance companies have come to terms to recognize the impact of technology on business in present circumstances. They have become more sensitive to online or e-commerce businesses risks and cover them adequately.
Since 2000, few companies like Lloyd's of London, Zurich Insurance Group and Chubb Insurance Group are beginning to cover the computer security breaches. American International Group's NetAdvantage Program addresses a host of e-commerce crimes like cyber extortion, content defamation, copyright and hallmark infringement, computer viruses, stealing, destruction or alteration of data. They offer rewards for apprehending hackers and recoup for post hacking crisis management. Many specialty insurers have come to the forefront to offer e-commerce protection packages. INSUREtrust.com, Hamilton, Ace Ltd's IT products, Okemos, Website Insurance& Security Program are some of the recent entrants in that field.
The chief advantages are that some criminal behind the keyboard cannot destroy your business. Information gives companies a competitive edge in global economy. It can be calamitous for the company, if the information is destroyed or purloined or computer virus pussy or divulged to competitors. Many insurers have started offering insurance products to protect company from network breaches or computer virus attacks.
Chubb Corporation's 'cyber-security' insurance policy provides comprehensive coverage against e-stealing, dishonorable e-communication, e-vandalism, e-threat and impairment of e-services. Many cyber insurers are addressing the tough issues like unsymmetrical information, adverse selection and moral hazards and other risk domains to provide more comprehensive solutions and coverage.
Cyber insurance is a potent weapon for rising Internet security. Cyber insurance products, now being offered by insurance firms, address the inevitably of e-businesses today.
