The Widespread havoc caused by the Love Bug, Melissa, and Anna Kournikova viruses made headlines around the world and cost businesses billions of dollars. Now, insurance companies around the world are offering specific policies against technology-related losses caused by viruses and hackers.
Zurich Insurance Group, Lloyd's of London, American International Group Inc., and Chubb Corp., for instance, all underwrite a product called Net Secure, which specifically insures against e-business losses for businesses and their customers. St. Paul's Insurance has also introduced a specific program to protect small technology companies from fraud, service interruption, and telecommunications theft.
A survey by Lloyd's, one of the largest insurance companies in the world, reported that 70 percent of insurance professionals believe that e-commerce will emerge as the single biggest insurance risk of the new century. Insurers have been successfully underwriting "cyberinsurance" policies for large, Fortune 500 companies, but they are just beginning to pitch the smaller-sized companies.
Unlike traditional business insurance, specific insurance plans for e-commerce and technology losses will vary greatly, says David R. Cohen, an attorney with Pittsburgh-based Kirkpatrick and Lockhart LLP. He advises that businesses should first examine their current insurance plans to find out whether they are already covered. "Don't necessarily believe the insurance company if you're denied," Cohen warns. Even if a business's current policy does not cover technology loss, "there are affordable policies out there [that do]," he says.
Cohen recommends speaking with a savvy insurance broker who has a strong knowledge of business needs and technology. Tom Harvey, President of Assurex International, one of the country's largest insurance brokerages, says that businesses "need to know if their current insurance covers this [technology-related loss]," and stresses that businesses must "think about protecting their systems in more than just a technical sense."
Cohen adds that businesses should check with their current insurance company to research what plans are available, and then go a few steps further. "Don't stop there," he says. "Coverage varies widely, and prices vary widely. Talk to at least three or four different insurance companies."