Daily Market Update

​Businesses need to test vulnerability of cloud-based applications… The reality of cyber risk from a business that was targeted… Nepalese government almost get it right on earthquake risk… And the Bay Area insurers who accidentally provided home cover…

Don’t ignore the risk in the cloud
Web based applications are fast becoming the choice of many businesses; they are cost-effective, accessible and cut down the need for powerful in-house servers. As with most things though, they are not without risk. As well as mobile and web applications, those operating in the cloud are popular targets for hackers, data and identity thieves and others who may wish to compromise your business. Whether the lack of vulnerability tests being performed on these applications by many businesses is due to lack of budget, expertise or understanding, they cannot be ignored. Weakness is one system can allow access to others. Michelle Drolet of data security company Towerwall says that business should “respect the impact of hacking, create a process, prioritize risks and outsource if needed.” Read the full story.

Cyber risk case study
A restaurant business with stores in four states is a typical example of the reality of a cyber attack. It was the day after thanksgiving and the Wasabi Sushi operation had suffered an attack which allowed thieves to access the details of customers. This meant shutting down the parts of the business that rely on computers – most of it! Crucially for business, the ability to process credit cards was put on hold, meaning they could only accommodate customers paying with cash and of course revenue suffered. A spokesman for the restaurants said that as well as lost revenue there is the possibility of being sued by customers whose data had been accessed. They said that insurance should be bought to cover the whole risk including the likelihood that securing computer systems may take a few days. Read the full story.

Government plan for earthquake free homes results in higher risk
The Nepalese government had the right idea when it came to a road-widening project. Its plan was to ensure that houses that were partially demolished during the works would be rebuilt so as to make them earthquake-resistant. This was certainly a boost for homeowners living in a valley that is prone to quakes. However, while the idea of incorporating risk management into a construction project makes a lot of sense, not monitoring the construction or providing the technical assistance that it required has proven a bad idea. The result is that construction has been haphazard and instead of helping to reduce the risk of earthquakes, experts say it has increased it.

Insurers provide home cover… literally
It must have been included in the risk assessment but certainly isn’t a common risk; a 4,000 square foot advertising banner being pulled by a plane over Freemont that broke free and landed on a house. No one was hurt or property damaged and the FAA is investigating. The irony is that the banner was advertising Geico insurance!

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