E-commerce, the Internet and technology are reshaping how business is done, yet, most companies do not understand how technology can impact their business, according to Kae Lovaas, president, Global Technology Underwriting, The St. Paul Companies. Lovaas addressed this issue with Minnesota insurance agents and brokers attending a seminar sponsored by The St. Paul’s global technology underwriting unit.
Lovaas said agents and brokers play a key role in educating their clients about e-commerce risks. “Any business with a website or a computer network faces potential liabilities associated with the ‘Big Three’ of technology based risk – namely intellectual property, privacy and network security,” Lovaas said. “The Computer Security Institute reports that, last year alone, 90 percent of U.S. businesses detected computer security breaches from both inside and outside their companies.”
Agents and brokers are already making a concerted effort to keep customers informed about cyber risks and exposures. “Unfortunately, many businesses don’t think they have an exposure until after a loss has happened,” said SueEllen Chastan, Willis of Minnesota Inc., Minneapolis. “Businesses need to assess their own individual risk, then sit down with their agent and decide how best to protect themselves.”
Lovaas said traditional insurance policies were developed before the Internet and the exposures arising from it. Insurance coverage gaps can include hacking events and denial of service attacks, web site extortion, unintentional release of confidential information and copyright or trademark infringements.
“The events of September 11th have heightened public awareness to the possibility of cyber-terrorism,” Lovaas said. “We’re working with our customers to ensure that they understand the potential risk associated with this type of attack.”
Lovaas and her colleagues also reviewed findings from a recent study conducted by the independent New York-based opinion research firm of Schulman, Ronca & Bucuvalas, Inc. for The St. Paul about e-commerce risks. The survey of executives at 1,500 companies in the United States and Europe revealed that businesses do not adequately understand the risks posed by technology, have difficulty identifying potential risk and lack the tools to manage them effectively.
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