A look at the insurance industry with regard to insuring e-businesses.
This paper outlines the threats posed to online businesses that include online billing and payment, programming languages, website design and supply chain networks. The paper discusses how future insurance companies will have to change their tactics in devising premium coverage that reflect the needs of online businesses but also the needs of the environment in which they operate. The paper presents suggestions to combat the risks that e-businesses are facing or are bound to face in the future.
“The insurance industry has changed drastically over the past few years. There has been great speculation on the issue of security and risk exposure. The government’s mandate of company disclosure has effectively increased the demand for risk management coupled with the increasing rise of e-commerce based operations. The real estate industry especially has raised high deductibles imposed on lower limits to restrict coverage terms and conditions for insurance. With increased premiums and skyrocketing coverage the insurance industry is now more cautious. Risk management programs are being promoted to protect the interests of the insurance companies and not of the clientele. Tangible risks aside insurance companies are neglecting the deep impact that e-businesses are imposing. E-businesses are beginning to dominate the stock market and the value of their businesses is increasing at an exponential rate. With the emergence of banks on the internet, online businesses are likely to increase in scope and depth. The span of e-businesses indicate changing needs such as risk management to combat complex online management issues like thefts, database security, corporate espionage or simply network break downs [Reza, 2002].”