Without cyber risk insurance, businesses are also exposed to financial damage caused by these cyber wormholes.

High tech vandalism has spawned a new type of insurance that can protect offices against high-tech thieves. While most business insurance policies exclude damage caused by hacker crimes, cyber risk policies cover losses such as theft of securities or tangible property via computer, damage to data or software and business interruption expenses.

“A computer mouse may not look threatening, but in the hands of a hacker, it can be a lethal weapon to business,” said Candysse Miller, executive director of the Insurance Information Network of California.

According to Carnegie Mellon University’s Software Engineering Institute, reported commercial computer intrusions rose 377 percent between 2000 and 2002, from 21,756 to 82,094.

To acquire cyber risk policies, companies are generally required to undergo a computer security assessment to determine their amount of risk before obtaining insurance. A business with average risks that purchases $12 million worth of coverage would pay approximately $25,000 a year. Policies’ prices can vary dependent on the safeguards companies take to protect themselves from computer attacks.

The damage caused by the breach of security by a single hacker can be in the millions of dollars. While anti-hacker insurance can pick up the tab for those losses, the most valuable effect is that it forces companies to become more involved in protecting their computer systems.

IINC offers the following suggestions to help businesses combat cyber crime:

• Assess information assets and vulnerabilities and identify potential enemies.
• Establish company policies about who has access to what information and publish them in the employee handbook.
• Change employee passwords periodically.
• If an attack occurs, call in a computer forensics investigator, they could find “electronic fingerprints”.

The Insurance Information Network of California is a non-profit, non-lobbying media relations organization supported by the property/casualty insurance industry.