Close

+1 (888) 982-9248 info@techassure.com

Archive for category: Risk Management

by

Top Five Causes of Data Breaches and Why Firms Should Buy Cyberliability

Because of advances in technology, companies have been able to grow and expand like never before. On the downside, cyber threats lurk around every corner, from hackers corrupting systems and networks to criminals attempting data breaches.

Because of the nature of their business, technology companies are at an increased risk to these types of threats. Here are some of the top causes of data breach and what steps you can take to ensure your company’s information is safe.

  1. Credential Theft: Hacking puts all of your sensitive information at the fingertips of individuals trying to steal your company’s most important information. In a recent study, 76% of data breaches occurred because of weak credentials. Password protection is essential to preventing hackers from entering your company’s networking systems.
  2. Application Vulnerability: Hackers use back doors and SQL injection accounts for almost half of all data breaches. Web applications are most vulnerable to this type of attack.
  3. Data on the Move: This type of breach involves stolen or lost-in-transit devices such as laptops, storage devices, hard copy reports, and hand-held devices. Securing these items during travel can help ensure that your sensitive information does not fall into the wrong hands.
  4. Insider Breach: This type of security threat involves insider attacks. Employees who can access company information can easily transfer firm financials, passwords, network and security access, etc. When employees go rogue, it is important to have a secure plan in place to prevent loss of data or worse.
  5. Employee Error: Employee negligence can inadvertently expose your firm to data breach. Some of these instances may be unpreventable, but it is important to educate your employees on how they can prevent data breach by following certain system protocols and implementing criteria each day that can help close the gap.

Maintaining a comprehensive cyberliability insurance and risk management program can ensure that your information is protected and that you will have a plan of action for managing the aftermath. Protect yourself and your firm’s credibility with an insurance policy custom tailored to your specific requirements. A TechAssure Association member can help you customize a cyberliability program around your unique risk profile. Please contact us for more information.

by

Top Risks in Global Expansions

If you are a technology or life science firm considering global expansion, you need to become aware of some foreign risks that need to be managed. Tips to handling foreign risks include:

Establishing a Global Risk Management Program – Handling of foreign risks is different from the management of domestic risks. Foreign risk requires different treatment and a firm understanding of the differences in laws, business practices and procedures for handling certain risks. With an ever-increasing number of firms that are expanding their operations to include facilities on foreign soil, it is important to establish overall goals for your risk management program.

The goals for your global risk management program should include the standardization of risk management controls, and an improved ability to predict potential losses. You will also need to eliminate gaps in your insurance coverage, identify hidden costs in your insurance program and ensure that you are in strict compliance with local laws and are leveraging economies of scale in your insurance program.

Political Risks Play a Role in International Expansions – Political risk is defined as the threat of losing assets, management control, or potential earnings as a result of political action by the host country. Generally speaking, a country with a stable government poses less of a risk than one in turmoil. Specialized Political Risk insurance policies can protect against certain types of perils for companies doing business or conducting operations in foreign countries. These insurance contracts often address business exposures faced by these companies as a result of foreign governmental action. Types of exposures that can be covered under political risk policies include confiscation, expropriation, deprivation, nationalization, political violence and currency inconvertibility. They can also be customized to include export credit.

Economic Risk Come in Different Shape and Size – Economic risks speak to the chance that a host country may impose sanctions that will restrict or regulate the activities of foreign corporations. Most common among these are exchange controls, which restrict movement of foreign money out of the country, tax policies that are often used to control foreign companies by placing large taxes on their products, and price controls in which host countries establish regulations controlling the price range of a business’s goods or services.

Don’t Forget the Cultural Risk – Cultural risk can be as damaging as political or economic dangers. National cultural risk is the possibility of doing something considered unacceptable by the social culture of the host country. Business cultural risk is the threat of doing something inappropriate within the business environment as a whole. Corporate cultural risk is the risk of making a cultural error when dealing with a specific company.

Managing foreign risks can determine your level of success in the global market. The international network of professionals in TechAssure Association can help you establish a solid global risk management program. Contact us to learn more about our members.

by

Growth of the Software Industry Presents Challenges and Opportunities

With virtualization and cloud technologies gaining traction, and the largest tech firms in the world taking massive market share, some people may be under the impression that the software industry is shrinking. However, this is far from the truth – the proliferation of new devices, new markets, and new ways in which to increase productivity with software have created greater opportunities for developers and entrepreneurs. With new opportunities, however, has come a set of challenges that software companies must overcome.

Challenges and Opportunities

For any consumer-facing software business to be successful, it must maintain a global focus. The greatest revenue comes from the ability to “grow big, then monetize.” The ease of deployment of modern applications – through both the web and mobile devices – makes reaching an audience relatively effortless. However, software organizations must prepare for the fact that their applications can achieve penetration in any market. Localization, user experience, and global outreach become critical elements for success.

For the more specialized B2B software organizations, global reach is still critical. Such organizations must prepare to do business with virtually any type of client and must account for the fact that the greatest growth markets are found in developing economies.

The technical infrastructures needed to support global markets are much more involved that those that software companies have dealt with in the past. Applications must work equally well across many configurations of PCs, across literally thousands of models of mobile devices, and across countless ISPs and mobile carrier networks. This often involves global distribution of redundant data centers, expensive and specialized scaling technologies, and integration of cloud services. While these offer greater opportunity for expansion, they also mean that there will be more potential points of failure.

However, inadvertent system failure is only one challenge for software firms. Expansion means greater visibility and exposure to malicious entities such as malware and hackers. However, companies have even more risks to account for than downtime and data compromise from sources such as these. This is because of international privacy and compliance standards, which are highly variable. Some markets are extremely strict when it comes to protecting user privacy; others have state-mandated firewalls, and other have little protection when it comes to intellectual property or security standards.

What Concerns the Software Firm’s CFO the Most?

The finance executive for a software firm focuses on both insurable and non-insurable risks. These may include risks that help with the company’s performance and keep it competitive in such areas as attracting and retaining talent, protecting valuable trade secrets and positioning the company to meet opportunities in growth and reputation management.

The finance office is also interested in all aspects of risks that pertain to legal, liability and compliance areas. Chief among these risks are product failure, compliance with regulatory issues and protection of their directors and officers from third parties. Other risks to manage include protection of the company’s intellectual property and physical property, business interruptions, security of customers’ private data and risks from network security and data breaches.

However, the finance office of a software firm will also work to balance cash flow cycles and make sure that funding for new projects remains front and center.

The financial performance is linked to how well the software firm manages its wide range of risks. The pace of technology moves rapidly and the speed of litigation and regulatory matters has increased accordingly, making risk management in the software industry more important than ever.

Working with a TechAssure Association member can provide you with the risk management tools to help your software organization navigate the risks and realize the rewards. Give us a call today to learn more.

by

New Product Launches: Are Today’s Tech Companies Exposed to Higher Risk?

Technology firms face a wide range of organizational risks. Managing unforeseen risks is a part of the industry.

Although having the right insurance is crucial to any business, it’s only one part of the puzzle. In order for technology companies to succeed, they must get the risks associated with new product launches right. Risk management takes a comprehensive look at risks, not just the insurance element, and formalizes a strategy and process to manage the exposures. It comes down to the economics of doing smart business.

Assumptions in product development are flawed. As each product is unique, a unique plan of development and launch must accompany it for success. A development and launch plan must be able to adapt to the ever-changing market. As “Big Data” grows and new developments in technology arise, members of the technology industry must take note of any risks that could keep their organization from meeting their future objectives.

Taking the proper measures during product development will enable a technology company to rise and manage the upside of risk. It is a fact that in today’s market, nine out of ten products will fail. Having a proper plan in place that is adaptable by the developers and board can help ensure success.

Here are a few tips that can help make your new product launches a success:

• Estimate the product’s holding cost and the transaction cost of batches produced. By optimizing the balance between these costs, a technology company can avoid the increased costs that come with producing work in batches that are too large. Maintaining the proper balance will boost efficiency and decrease the possibility of defects within the product. This can also help you manage your property and liability exposures.

• Losing opportunities due to sticking to a singular development plan can increase risk of product launch failure. Staying within your company’s comfort zone is not conducive to proper product launch and development. Because each product is intrinsically different, you should expect that its development would be different as well. A company needs to stay competitive by pushing the envelope within the bounds of a well-structured risk management plan. Of course, you should balance this with any increase of risks from product failures. 

• Rushing a product’s development or launch can be debilitating to a business. Controlling the rate at which a product is developed solely based on company productivity sets up a product and a company for failure. While it’s true that meeting deadlines is of paramount importance, releasing a rushed and diluted project will increases the product’s defect rate and liabilities to the company.

Risk assessment is a systematic process of evaluating the potential risks associated with a new product, activity or undertaking. It is important to determine the exposure and costs. Careful planning will enable a company to place priority on each type of risk involved before a new product launch.

Lastly, having a corporate insurance program in place that covers all elements of your new product launch is important. Insurance coverages important to new product launches could include: business interruption, warranty programs, adjustments in your general liability program and technology errors and omissions.

The members of TechAssure Association can put together a program that protects your investment and ensures that your new product launch is a success. Please contact us for more information.

 

by

Pointers for Technology Firms that are Establishing a Board of Directors

As your company grows, the time may come when you are in need of guidance and direction from a team of experts. Consider the areas of your business where you lack expertise and need some direction or input to continue your company’s growth. Establishing a board of directors may be the solution to maintaining growth and establishing sound direction.

The board of directors, serving as a company’s governing body, is responsible for the overall management of the business. They set policies, establish long-range goals and approve operating budgets, as well as evaluate and hire key managerial staff. Though they are not required to know everything about your specific business, they are required to act responsibly as they carry out their duties.

Establishing a board of directors for a technology firm can be difficult. At times, a less mature technology firm could take many different directions. However, there are some important points to consider when putting together a board.

• Provide a job description for each potential member of the board. It is vital that prospective board members have a clear understanding of what is expected of them and what their responsibilities will be. Without a job description clearly laying out was is expected, the board is sure to be unproductive.

• Be patient when establishing a board of directors. Proceeding carefully gives you the opportunity to learn more about the individuals you are considering, and decide if their motivation to join the board is compatible with your company’s agenda.

• Look beyond your inner circle. It is crucial to recruit the best talent available when creating a board. While you may know people with the skills you require, they may not have the right expertise or experience.

Establishing a board of directors can be beneficial to your technology firm in many ways. Besides bringing expertise and know-how, a board of directors can provide instant credibility to an organization. Having an independent body overseeing auditing procedures and eliminating potential management abuse and fraud can be very attractive to potential investors.

Once your board is in place, your company is properly positioned to go to the next level. However, it’s important to recognize that with a new business structure comes new risks. The members of TechAssure Association can help you manage your management liability exposures. They have the knowledge, tools and expertise to help you respond to a wide range of risks that face your board members. Please give us a call for more information.

by

5 Ways BYOD Policies Can Increase Data Breach Vulnerability

If you are responsible for managing risks in your organization, you know that any unforeseen incident can endanger the assets and earning capacity of a business. While it’s clearly important to have a solid insurance program in place, having a comprehensive risk control plan in place is equally important.

As the concept of Bring Your Device (BYOD) enjoys growing popularity amongst businesses, many employees are celebrating their newfound freedom of accessing data on the go beyond the confines of the cubicle. By using the BYOD concept, companies are enjoying reduced costs in the form of decreased expensive hardware configurations and are seeing the benefits of having a growing mobile workforce. However, what these firms did not anticipate was the growing possibility of data security breaches.

Hackers can breach company networks using linked applications, such as a company’s email account to access, extract and erase sensitive data. By accessing social media and personal email accounts, hackers easily obtain the information they need to wreak havoc.

In addition to securing a solid corporate insurance program for your organization, there are five things your company can do to overcome these security risks with BYOD. Jeff Stark, CPA, describes the following measures to help prevent a data security nightmare.

Identification of weaknesses and risk assessments. Sensitive data can’t be protected if it is not identified. As a result, Stark recommends that you begin by educating users on which data is confidential. It’s also important to follow up with assessments of your firm’s physical and network security. The rule of thumb is that if there is easy remote access to data storage sites from mobile devices, then effective network security is not sufficient. One measure is to ensure a password policy consisting of minimum character lengths, special characters, and changes to the password on a regular basis. Remember to have your IT department insist that employees not write down their frequently changing passwords and leave them in plain site in their workspace.

Establish levels of access. General users should not be granted access to the same areas that administrators and other higher end IT personnel have. Stark recommends that these “super-users” access a separate rights account or role for network management.

Use firewalls and encryption. Firewalls prevent unauthorized access to begin with and are a basic requirement. Network encryption adds a second layer of protection to prevent the wrong parties from accessing sensitive data.

Use offsite backup systems. Catastrophic data losses occur when in-house equipment fails or is breached. Whether it is cloud-based and/or physically located offsite, data is more adequately protected from many types of disasters as well as physical security breaches and damages.

Periodic auditing. Just because you have established data security measures, it doesn’t mean that you can now rest and let your guard down. You must carry out periodic risk assessments because of ongoing changes and upgrades in software and hardware which may change access capabilities. Stark recommends that you conduct audits at least once a year or whenever you make major change to the network.

While the BYOD concept has saved costs and facilitated a mobile workforce, it has also created a whole new set of security issues that you must address. As your organization assesses risks and establishes a solid insurance program, consider taking steps to prevent catastrophic data losses through breaches that can occur easily without a BYOD policy.

The members of TechAssure Association assist companies with insurance and risk management solutions that are unique to the technology sector. For more information on cyberliability insurance and other services, please give us a call.