Your business probably has insurance against accidents and natural disasters, but when it comes to everyday online risks, you’re on your own.
The Internet is as risky as it is necessary to your business. Global e-commerce revenues surpassed $1 trillion last year; 144 billion emails are sent each day; more than 1 billion people are actively engaged on Facebook, and the majority of data collected for business purposes is relayed over the Internet.
But the Internet has always been fraught with risks as amoral opportunists, malevolent hackers, criminals and terrorists have found ways to leverage it for their own purposes. The risks can be minor, like someone hacking your system for a few free products, to something major, like Booz Allen Hamilton’s potential liability for Edward J. Snowden’s breach of classified government information.
Can you avoid these risks? Not entirely. Like offline risks, the best you can do is find ways to manage your exposure to them, so if you’re impacted, you can survive the fallout. The best tool against any risk is insurance and herein lies the problem: Insurance companies haven’t caught up yet to Internet-related risks.
Insurance Protection Needed
From an entrepreneur’s perspective, insuring against Internet-related threats is the opportunity of the century, with nearly every business in operation today needing some type of protection. But according to Scott Kanry of Aon Risk Solutions and Robert Loscouski of Axio Global, the insurance industry isn’t yet structured to underwrite Internet-related risks. Their recent analysis indicates that insurance companies lack the equivalent technical skills for Internet engineering that are present in other types of underwriting like property-related insurance. They also contend that the industry lacks an underwriting framework to properly define, assess and price risk. Lacking both knowledge and process, it’s difficult for insurers to provide products that will satisfy business owners.
