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Cyber Security Challenges

Cyber Security Challenges
diciembre 18
2018

The relentless advancement of Information Technology (IT) over the last four decades has led every company and industry to question their business model in order to, in many cases, survive the disruptive shockwaves of the new ways of doing business in the international market and in the so-called digital economy. In this period of time, new business empires have emerged at a chilling speed, creating products and services that have changed practically all of our social environment and the way we do even the smallest activities, from entertainment to the way we interrelate and communicate with other individuals and do business.

With the use of artificial intelligence and quantum computing the next forty years promise even more spectacular technological advances in terms of new products, services and ways of doing everything a human being is capable of doing. Likewise, the 5G connectivity promises to connect each and every one of the devices we use to process and transmit information at low cost and with high data transfer capabilities

THE RISKS

Having said all of the above, it is also time to point out that the costs and risks that the advance of information technology derive are high, and sometimes difficult to sustain by small and medium size companies, being the information security cost of the highest priority in any industry or company.

Industrial and technological espionage, as well as cybercrime activities, also known as hacking, have multiplied and expanded throughout the world generating great benefits to some and, to others, great economic, information and even reputation losses.

The most famous cases of multinational companies that have been unduly hacked by cybercriminals have been, among others, LinkedIn (2012), Target (2013), JP Morgan and Home Depot (2014), UBER (2016) and Chipotle (2017). All these multinationals have had to make large investments to repair the systems hacked and have had to pay the damages caused to third parties, in addition to the appropriate government sanctions. Moreover, the value of the shares of these companies, at the time, suffered a considerable decline, being the most prominent in 2018 the case of Facebook, which as of the date of this article has not fully recovered.

ALTERNATIVE FOR SMALL & MEDIUM SIZE (S&MS) BUSINESSES: INSURANCE AGAINST CYBER RISKS

Notwithstanding that large and S&MS businesses are all vulnerable to a greater or lesser extent to cyberattacks, it is the latter group that have the least economic resources to safeguard their IT systems and information. To remedy this situation, some insurance companies have come to the business market to offer coverage against cyber risks. The coverage in some cases includes prevention services and immediate support to deal with a criminal attack. Cyber insurance covers from the responsibilities for the braking on information security and privacy to payments for extortion and own or third party damages. Also in some special cases, the insurance policy may include legal assistance services and payments for the loss of income or information forensics.

The design of cyber insurance policies can be done case by case and tailored to each stakeholder, so that the basic needs and vulnerabilities of each party are met.

There is really no minimum or maximum insurable amount. Every person interested in acquiring an insurance policy can decide how much they want to invest to be insured against cyber risks. Obviously the lower the internal risk, the lower cost.

CONCLUSIONS

The ongoing business risks associated with cyberattacks are a priority issue to be discussed on any board of directors and carefully considered on the corporate governance of any institution regardless of the size of the business. Today, no one is exempt from being vulnerable to possible failures in ordinary or special cyber protection systems and in many cases the damage can be truly significant.

Due to the above, it is highly recommended to all companies and institutions to consider the acquisition of an insurance policy against cyber risks, since in most cases they can be specially designed and tailored to each stakeholder. The same insurance institutions now also provide preventive or corrective support to covered persons, including legal defense expenses and forensic investigation necessary to face potential claims for involuntary damages to third parties.

C.P.C., P.C.FI., Adv. LLM., MI., Juan Ángel Becerra Cantú
Integrante de la Comisión Técnica Fiscal Internacional del Colegio
juan.becerra@cgctax.com

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