Five Risks You Should Transfer If You Are An It Firm

Posted by Nidhi Mahajan
April 4, 2017

Self-Published

There are many types of information technology companies. But whatever the type of work done by these companies, one thing remains common; that is, providing service to a client. Most IT firms, if not all, are service providers, consultants, advisors, or managers of service processes for other firms or individuals. These businesses or individuals may pay fees and charges for using the services of IT firms and often depend on these services in their day to day work.

For example, a large manufacturer using a Human Resource Management software from an IT giant. In many of these services provided by the IT firms, they take responsibility for data storage, security, management of software and other activities required by their clients.

Risks Faced by IT Firms

If you are an IT firm, you understand and face various risks daily, which you will have to manage to sustain yours and your client’s activity. These threats faced by all firms using IT services or providing them have been classified under different heads for better identification and severity. One such classification of risks is as follows:

  1. General IT threats

General threats to IT systems and data include:

  • Hardware &Software Failure:Power loss, data corruption, etc.
  • Malware:Malicious software designed to disrupt computer operation
  • Viruses:Computer code that disrupts the network or computer operations by copying itself and spreading from one computer to another.
  • Spam, Scams&Phishing:These are unauthorisedemails that seek to gain personal information of the receivers.
  • Human Error:Data processing mistakes, opening infected email attachments.
  1. Criminal IT threats

Targeted threats to IT systems include:

  • Hacking: Accessingthe computer system Illegally.
  • Fraud:Using a computer to alter data for illegal benefit
  • Passwords Theft:May involve hacking into safe database for access to usernames and passwords
  • Denial-of-Service:These attacks aim to deny the access to authorisedusersuntil a ransom is paid
  • Security Breaches:Physical break-ins as well as online intrusion
  • Staff Dishonesty:Staff may pass on or sell sensitive data to others.
  1. Natural Disasters

Managing the Risks

Organisations using information technology or offering their services on these platforms need to understand and constantly try to beat these risks. There are multiple layers of security you will need to build as an IT firm to ensure that these threats do not affect yours and your client’s business.

Following steps can be useful in ensuring a 360o safety:

  • Create the Security Grid
  • Buy Indemnity Insurance

Security Grid consists of multi-layer security infrastructure which may expand from the physical security measures like staff ID cards and access cards to antiviruses and firewall applications on the networks. IT and data access policies also form a part of your overall security grid.

But the security efforts can only go so far. Though they reduce the chances of a threat causing damage, there is no foolproof way of ensuring safety. The threats are evolving daily, and you will need to keep pace with them to maintain your firm’s IT infrastructure’s integrity. This opens up the need for the last mile cushion which should provide a soft landing in case you are hit by one of the critical attacks.

Indemnity Insurance for IT Service Providers

While natural disasters and hardware risks can be managed through general fire insurance policies. Professional indemnity insurancecover provides protection for the firm, including its subsidiaries,againstthe claims of negligent acts and error of judgement in the performance of professional services.

The policy pays for the:

  • Legal defence costs
  • Any Legal claims payable by the insured due tojudgement, arbitration, or negotiations under the purview of the policy
  • Infringement of intellectual property rights
  • Loss or legal, financial compensation payable due to data theft or breach of privacy

As the last mile safety cushion this cover offers good ring of security. However, there are certain exclusions to these policies buyers should be aware of:

  • Fines and Penalties levied on the firm
  • Loss due to inconsistent security standards
  • Employee fraud (covered under commercial crime insurance, another type of indemnity policy)
  • Criminal breach of trust and dishonesty

This policy when combined with cyber insurance completes the insurance umbrella to include all kinds of loss due to cyber threats. For better identification of your insurance needs, you may connect with one of the online insurance advisors, such as SecureNow. These modern insurers have the expertise to provide multiple insurance quotes and the best combination of plans as per your needs.

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