Business Not Prepared for E-Risks, Survey Reveals; E-Policy, Software, and Insurance Help Cut Losses, Experts Say.

Business Editors/High-Tech Writers

BELLEVUE, Wash.--(BUSINESS WIRE)--March 18, 2003

A new survey reveals U.S. employers are making only a half-hearted effort to keep the workplace free from e-disasters including legal claims, malicious hackers, viruses, and security breaches.

While 19% of employers have battled lawsuits stemming from e-mail/Internet abuse, 31% have experienced the loss of confidential information/intellectual property via e-mail, and 35% have terminated employees for e-mail/Internet misuse, few employers have implemented a comprehensive e-risk management program to limit electronic exposures and reduce liability. Consequently, employers should brace for e-disasters that may cost employers millions in lost productivity, computer assets, credibility, and customer confidence.

Unfortunately, most employers fail to see attacks as a people problem as well as a technological challenge. While 69% of employers have written policy governing external e-mail -- the leading source of viruses -- only 48% back up written policy with content security software. Fewer than half (40%) educate employees about viruses, and merely 14% ban the opening of e-mail attachments.

"Effective e-risk management is a three-tiered approach that combines written e-policy with comprehensive employee education and enforcement in the form of content security software," said Ivan O'Sullivan, VP, Business Development, at Clearswift, the worldwide leader in content filtering software. "Employees who understand how viruses and other threats enter the system and how to keep them at bay can play a valuable role when it comes to keeping the electronic workplace safe and secure."

Assurex Global Partner Andy Barrengos notes that employers eager to reduce -- and in some cases eliminate -- costly e-liabilities should implement effective e-risk management programs combining best practices operational and training programs, preventive security tools, and comprehensive e-insurance policies designed to mitigate damages after e-disaster strikes. "Could your business survive the theft of clients' data, of your intellectual property, or an unplanned shut down of a few days or even a few hours? E-liability and revenue protection insurance policies have improved a great deal and are a must for organizations with real exposure to viruses, attacks by malicious intruders, disgruntled employees, or vengeful ex-employees," said Barrengos, Vice President of San Francisco-based Woodruff-Sawyer, an Assurex Global Partner.

While 28% of employers are concerned about confidentiality breaches and 37% have experienced the intentional theft or accidental loss of data, few are taking advantage of cyber-insurance protections. Of the companies surveyed, 22% have crime loss coverage, 6% have unauthorized access/unauthorized use coverage, and only 2% have purchased extortion and reward policies.

The experts at Assurex Global and Clearswift also note that to reduce electronic liabilities, protect corporate assets, and stay out of court, employers must manage employees' online behavior. Thanks to employee misuse and abuse of computers, 14% of employers have defended themselves against claims of sexual/racial harassment/discrimination resulting from external e-mail/Internet use; 5% have defended hostile work environment claims; and 6% have had electronic records subpoenaed by courts in conjunction with workplace lawsuits.

With e-related lawsuits on the rise, it's surprising that employers still lack written policies governing external e-mail use (31%) and Internet use (19%). Equally disturbing is the fact that 54% of employers have failed to install content security software to manage external e-mail and another 49% lack content security software to manage Internet content in compliance with written e-rules.

Overall, employers are not taking full advantage of the protections offered by many e-insurance products. The companies surveyed report owning the following e-insurance products: Electronic Data Processing Insurance that extends beyond general business liability policies (6%); Media Liability Insurance (3%); Patent Infringement Insurance (6%); Computer Software and Services Errors & Omissions Insurance (13%); Product Liability Insurance (10%); and Director's and Officer's Insurance (19%).

Assurex Global views Director's & Officer's (D&O) coverage as a must for publicly traded companies exposed to allegations of SEC violations. When lawsuits alleging fiscal irresponsibility, mismanagement, violations of security laws, or other wrongful acts occur, corporations, directors, and officers may be at risk. D&O Insurance protects corporate assets, as well as the personal assets of directors and officers.

The Assurex Global cyber-insurance experts also advise any company using the Internet to dispense professional advice or sell services or products to consider Computer Software and Services Errors & Omissions (E&O) Insurance. Those most in need are firms whose professional advice, services, or products -- if flawed -- could cause financial loss to the consumer.

The best advice: Assurex Global and Clearswift recommend any organization with computer assets at risk assess its e-risks, then establish an e-policy, content security, and cyber-insurance program to help reduce electronic exposures and lessen the likelihood of costly litigation and other e-risks.

About Assurex Global

Assurex Global -- the world's largest privately held risk management and commercial insurance brokerage group -- has independent insurance brokers on six continents. The Partners of Assurex Global are staffed by more than 12,000 experienced industry professionals who generate combined annual premiums in excess of $16 billion. Assurex Global delivers seamless global insurance, risk management and employee benefits products and services from more than 130 offices located in every major city of the globe. Assurex Global Partners are among the leading independent insurance agencies in their respective markets. What differentiates Assurex Global from national brokers is that Assurex Global Partners are managed by their owners. Typically employing 100 professionals, Assurex Global Partners deliver property, casualty, surety, life and employee benefits insurance for large and small clients. Information about Assure Global and its Partners is available at www.assurexglobal.com.

About Clearswift

Clearswift is the world's leading provider of software for managing and securing electronic communications, with a 23% share of the global content filtering market. Clearswift delivers the capabilities for organizations to protect themselves against email and web-based threats, meet legal and regulatory requirements, implement productivity-saving policies and manage intellectual property passing through their network.

The company's expertise lies in establishing and enforcing e-policies. Content security threats include the circulation of inappropriate images and text, Spam and oversize files, loss and corruption of data, breaches of confidentiality, as well as viruses and malicious code. Clearswift's software portfolio includes Clearswift MIMEsweeper, a product family for email and web e-policies and Clearswift ENTERPRISEsuite, a software infrastructure for managing e-policies in complex environments. More information about Clearswift, its products and services is available at www.clearswift.com

For information or to schedule an interview, contact Andy Barrengos at 415/415-399-6312 or Susan Majerus at 480/354-4334.