Insurance firm extends coverage to cyberspace

To provide protection against Internet-related risks not normally covered by traditional insurance policies, American International Underwriters (AIU) and systems integrator Datacraft Asia Ltd. last week introduced an e-business security assessment and insurance service in Hong Kong.

Covering Internet-related risks such as Web content liability claims, loss of information, e-business interruption and network security failures, the netAdvantage insurance product is among the first of its kind in Asia-Pacific, according to Chin Feng, vice-president of the financial lines department at AIU. The product was launched in the U.S. last year.

The two-part insurance product requires prospective clients to conduct a security assessment. Datacraft evaluates the underwriting risk associated with the company’s e-business assets, including its IT infrastructure as well as security-related policies and procedures, said David Cheng, manager of Datacraft Asia’s security consulting services. The assessment methodology has been developed in compliance with international standards BS 7799 and ISO 17799, he said.

Based on the results of the evaluation, Datacraft makes recommendations about improvements to beef up security. The underwriter simultaneously works to formulate insurance policies that mitigate the client’s Internet security and liability exposure.

Along with the assessment report, AIU takes several additional factors into consideration in developing the Internet-oriented policy, including the scope of coverage required, the value of transactions made over the Web, and the client’s financial stability.

“We put in financial stability as well, since if a company is not doing well, they tend to cut corners, and security can be one of the things that is going to be compromised,” Feng said.

The standard three-day and five-day Datacraft security assessment packages cost US$6,000 and $8,000 respectively; a 50 per cent rebate is applied if the client chooses to underwrite the insurance policy with AIU after the assessment is completed.

Following Hong Kong, netAdvantage will be rolled out in mainland China, Taiwan, Singapore, Malaysia, Thailand and the Philippines, though dates have not been specified.