25Mar

Infographic: The Cybersecurity Shortage

The projected loss from cyber attacks worldwide is forecasted to be in the trillions in 2021. With many companies shifting to virtual offices – some even permanently – malware, phising, and other forms of data breaches will most likely increase. However, data shows that there’s an alarming gap between the need for tighter cybersecurity and the number of organizations that understand its importance.

The infographic below provides impactful statistics and proposals to shorten the gap.

Sources:

https://www.varonis.com/blog/cybersecurity-skills-shortage/

https://www.protectwise.com/post/survey-suggests-younger-generations-including-females-may-fill-the-cybersecurity-talent-gap/

https://www.varonis.com/blog/cybersecurity-statistics/

5Mar

Understanding the Risks of Managing an e-Commerce Business and the Insurance You Need

E-commerce has had a huge impact in Asia even throughout the pandemic. People have been able to buy and purchase products overseas sans a physical store. The requirement of having a brick-and-mortar store has taken a backseat for many small business owners as well as large retail corporations.

And as is the case with anything emerging, the industry’s growth brings with it new risks that may not have existed a decade ago.

The fact that the e-commerce industry is growing at an incredibly fast pace is yet another reason for online retailers to make sure that they are protected from the many risks that can come with such rapid growth. According to recent studies, e-commerce sales increased to $4.058 trillion in 2020 and made up more than 14% of total worldwide spending.

Covid-19 has played a crucial part in this growth with lockdown and physical restrictions that encourage consumers to shop online.

So what are the risks involved?

1. Cybersecurity – e-commerce is one of the most targeted industries of cyber attacks, with 32.4% of all cyberattacks targeting this industry. Ecommerce stores are known to hold highly sensitive information such as a  buyers’ credit card information and home address.

Online shopping sites are liable for these types of breaches which can result in millions of dollars worth of lawsuits, especially for large companies. Having the right cyber insurance is a must-have.

2. Product Liability – Any product or service can malfunction and result in some form of injury or accident. Defective products or the lack of hazard warnings are grounds for legal liability even if you’re not the direct manufacturer. Online retailers have to remember that as long as you are part of the distribution chain, you may be deemed responsible.

Some companies have been opting to get insurance called Technology Errors & Omissions Insurance. This type of insurance combines product liability and cyber insurance, therefore addressing incidents involving physical injuries caused by a product, and the unauthorized disclosure of proprietary information, respectively.

Aside from product liability insurance, it’s recommended that companies purchase D&O insurance to have an added cover for directors, officers, and other decision-makers in the company in case of lawsuits.

3. Intellectual Property Issues – Copied designs and the use of copyrighted material (even if one does it unknowingly) can lead to legal problems for e-retailers. In fact, an e-commerce store can face liability related to a third party’s ad that’s seen on its website. A general liability insurance can cover these issues.

If your business keeps and receives shipped goods in a warehouse via a third-party provider, or if you ship your products directly to customers and other distributors, then cargo insurance may also be something to consider. This insurance covers your business from loss of inventory while in storage or shipping.

Need more information about the insurance you need for your e-commerce business? Get in touch with us today.

 

4Mar

Understanding Professional Indemnity Insurance with Examples

Let’s first define what professional indemnity (PI) insurance is.

This is a type of insurance cover that protects a company from incurring legal costs and expenses in their defence, as well as any damages or costs that may be awarded if they have been alleged to have rendered inadequate advice, services or designs that caused a client to lose profit.

It’s also often referred to as professional liability insurance.

In Hong Kong, it is compulsory for some businesses to take out liability or professional indemnity insurance before they can operate.

Here are some examples of professional indemnity insurance claims you may find useful:

Case Study 1

Government Statutory Board | 6 Staff members | HKD5.5M turnover

Background: 
A claim was made against the Insured by one of its former clients. The claim alleged that the Insured failed to protect the claimant’s medical conditions whilst acting for the claimant in court, resulting in the claimant’s identity being easily searched online and discriminated against.

Outcome:
The Insured appointed panel solicitors to assist with managing the dispute. The Insured incurred defence costs of HKD280,800 which were indemnified by the Policy.

Payment: HKD280,800

Case Study 2

Insurance Broker | 5 Staff Members | HKD3.9M turnover

Background: 
A claim was made against the Insured by their client, a recreation club. The client alleged that the Insured misrepresented that their Directors and Officers Policy would cover the club’s own rights which were, in fact, incorrect when a claim was presented to the insurer and was declined. The claimant further alleged that the Insured failed to exercise reasonable skill and care whilst advising and obtaining adequate insurance.

Outcome:
The Insured appointed panel solicitors to assist in defending the matter against them. The claim was settled at mediation. The Policy paid a total for settlement costs of HKD1,482,000 and defence costs of HKD351,000

Payment: HKD1,482,000 plus HKD351,000 in defence costs.

Case Study 3

Logistics Operator | 8 Staff Members | HKD1.95M turnover

Background: 
The Insured, a logistics operator, was storing vaccines in its Cold Room for their client. A claim was made against the Insured by their client alleging that there had been a fall in temperature in the Cold Room which was a result of a hardware malfunction, which damaged their products. The Insured notified Insurers for their Fire Policy as well as their PI Policy. The Insurers of the Fire Policy indemnified the Insured to the sum of HKD1,287,000 which was insufficient to meet the total replacement cost of the vaccines due to a global shortage in certain of those vaccines. One of the vaccine’s cost had increased from HKD29.02 to HKD519.87 per vial. The Claimant sought further damages of HKD1,950,000.

Outcome:
The Insured appointed panel solicitors to assist with managing the claim against them. The Policy was triggered and paid for defence costs of HKD117,000. The claim was settled at a mediation for HKD319,800 which was also indemnified by the Policy.

Payment: HKD319,800 plus HKD117,000 in defence costs

Need PI Insurance for your business in Hong Kong? We can help find the best insurance covers for expats.