Business Crime and Cyber Risks

According to the FBI director says, there are two kinds of companies: the ones that were already hacked and the ones that will be hacked! The fast digitalization of business is creating new and more intelligent ways to create financial damage to companies. According to research, one in every three companies was already a victim of business crime actions.

Variety of Risks

Business crime has a wide variety of causes: the most common are fraud, breach of trust, theft, data and computer misuse as well as cyber risks (hacker attacks). Because of the wide scope of events there is currently no single insurance product which would cover all the risks.

But the insurance market has reacted on business crime events and offers fidelity insurance and cyber protection policies which have some overlaps in certain features . Fidelity Insurance covers mainly fraud, breach of trust and theft from trusted persons or third party service providers; Cyber Protection takes care of manipulation into the IT-system from internal or external abusers.

For some of the risks there is no insurance protection available – for example money laundry, corruption, manipulation of balance sheet and cartel violations. For these events, companies need to take preventive measures via the analysis of processes and the implementation of control and security systems.

Management obligations

Management, Risk and Compliance Officers are obliged by law (European and local laws) to identify and manage these risks to avoid any damage to the company and to make sure that the legal obligations are fulfilled. If this is not done the managers will be personally liable in case of a claim.

As the business structure is becoming more international and more complex, responsibilities and control mechanisms are more difficult to identify and to implement. The fast-increasing digitalization is creating an additional threat.

Risk analysis and a tailor-made coverage concept by the AU-Group-German Desk

Because “business crime” has such a wide scope there is no single insurance coverage by one underwriter available. The insurance offerings differ significantly between the underwriters and therefore it needs an expert to be able to advise you about the best coverage concept for your company. With the potential for partial overlapping of the insurance policies the AU-Group-German Desk makes sure that there will be no gaps in cover between different policies and that you will not pay twice for the same risk features.