The lack of preparedness on the part of businesses to manage risks posed by the Internet, e-commerce and computer technologies was the theme of an address by Jon Farber, senior underwriting director, The St. Paul Companies at the recent “Cyber Risk 2001” conference sponsored by the Institute for International Research.
Farber also provided forum attendees with insights into what insurance professionals, risk managers and corporate executives should do to effectively manage a growing range of technology exposures. That was the major finding in 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 U.S. and Europe revealed that most businesses do not adequately understand the risks posed by technology, have difficulty identifying potential risk and lack formal processes to both monitor and manage them effectively.
Farber contends that the insurance industry needs to be proactive in educating corporate risk managers about e-peril threats. He said the industry should discuss best practices with clients to help identify, quantify, and mitigate risks associated with e-commerce; review traditional insurance coverage for potential gaps related to e-risks; help determine if risk transfer should be part of a company’s technology risk solution; and provide targeted insurance products and services to transfer part or all of this risk.
Farber said traditional insurance policies were developed before the Internet and the exposures arising from it. Typical coverage gaps can include hacking events and denial of service attacks, website extortion, failure to protect confidential information, and copyright or trademark infringements.
More information about the survey is available at http://www.stpaul.com/cyberrisk-survey.
Was this article valuable?
Here are more articles you may enjoy.