Survey Reports Businesses Not Prepared for E-Risks

March 18, 2003

A new survey reportedly 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, according to Clearswift, a provider in content filtering software.

While 19 percent of employers have battled lawsuits stemming from e-mail/Internet abuse, 31 percent have experienced the loss of confidential information/intellectual property via e-mail, and 35 percent 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 reportedly brace for e-disasters that may cost employers millions in lost productivity, computer assets, credibility, and customer confidence.

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

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

The experts at Assurex Global ( and Clearswift ( also noted 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 percent of employers have defended themselves against claims of sexual/racial harassment/discrimination resulting from external e-mail/Internet use; 5 percent have defended hostile work environment claims; and 6 percent have had electronic records subpoenaed by courts in conjunction with workplace lawsuits.

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

Overall, employers are reportedly 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 percent); Media Liability Insurance (3 percent); Patent Infringement Insurance (6 percent); Computer Software and Services Errors & Omissions Insurance (13 percent); Product Liability Insurance (10 percent); and Director’s and Officer’s Insurance (19 percent).

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