IT Risk For SMEs Could Pose Industry Problems

by Stewart Douglas

Story link: IT Risk For SMEs Could Pose Industry Problems

SMEs are apparently open to risk from IT and technology failures as a result of a lack of adequate cover, according to a report released today by insurance analysts NIG which called for the insurance industry to work more closely with companies over the coming months.

In the study released today, NIG concluded that many SMEs lack essential IT support, which could leave them vulnerable to losses arising from system failures and crashes, a factor which may end up giving rise to substantial liability in the insurance sector.

According to the report the number of SMEs using broadband internet connections has increased dramatically over the last few years, whilst at the same time the dependency rate on those connections has also skyrocketed.

As a result the level of exposure to risk of most small business operations in this area has increased, with many expected to suffer in the event of a widespread systems outage as gaps in existing policy cover fail to account for employee interference in the system and its organisation.

At present SME cover for IT systems damage does not cover the intromissions of employees in so far as a downloaded virus or trojan mistakenly allowed access to the system could lead to a gap in the cover under current policy offerings.

The report suggested that whilst there is a responsibility on vendors to make sure their staff are adequately trained in handling information systems, there is also room for the insurance industry to get involved and help proactively promote more in-depth cover of IT systems damage for SMEs.

It remains to be seen whether the industry will embrace the findings and approach SMEs with more wideranging support for the acts of their employees in the course of using their IT systems, and whether the report will usher more advanced technical support contracts to be sought by the two thirds of SMEs currently without cover.