Creating a Stable Psychology for Insurance Participants in Business

The enterprise's e-commerce has been transferred to the insurance company. Moreover, the enterprise's e-commerce risks originate not only from outside the enterprise but also from within the enterprise. Therefore, risk prevention must also include training for employees of the e-commerce enterprise.

3.2 Support in human resource training

Training human resources is as important as other parts of risk management. Mistakes, whether intentional or not, by employees can lead to serious consequences, and their reactions and handling of situations in the face of external risks also contribute to minimizing the level of possible losses. For example, when seeing unusual signs in the computer system, an employee can raise alarms for the entire system, important data will be immediately copied to backup portable hard drives (back-up), transactions will be forced to pause or switch to traditional transaction methods... Reactions like the above example are extremely important, but to implement them in specific situations will be extremely difficult. It can be said that human resources training for businesses will be considered an opportunity for insurance company cybersecurity experts to provide updated information, and at the same time create hypothetical situations for employees to practice.

Thus, these supports are essentially a measure to prevent and limit losses that the insurance company does for customers for the benefit of both parties. AIG Insurance Company also established a quick response center via telephone, customers, partners and employees of insurance-buying businesses can call this center at any time to request support.

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4. Create a stable mentality for insurance participants in business

Sometimes, business psychology is something that people think is not important. However, in a business environment that is always full of risks, a stable psychology is an invisible competitive advantage that not all e-commerce businesses can maintain. In the previous section, the case of the UK Internet service provider Cloud-Nine, which went bankrupt due to DOS attacks, showed that not all businesses are immune to the risk of bankruptcy due to e-commerce risks. Thus, to have a stable psychology, businesses must be able to recover financially after losses caused by e-commerce risks. Businesses must be assured that they are able to withstand risks and can continue to do business after losses occur. To do so, businesses have no other choice but to buy e-commerce risk insurance.

III. Contents of risk insurance in e-commerce

Currently, there are many insurance companies in the world that provide this type of insurance such as ACE, AIG, CNA, Chubb, St.Paul... However, in Asia, there is almost no reputable provider of E-commerce risk insurance services. The leading companies in this insurance field are still giants in the traditional insurance market. Typically, the two corporations AIG (American International Group) with AIG NetAdvantage Suite TM and Loyld's with Esurance™ are the two corporations that dominate the E-commerce risk insurance market. Therefore, to serve this section, the author would like to use two E-commerce risk insurance products of the two companies to illustrate.

1.Insurance objects

In traditional insurance, the insured assets are tangible assets. However, in e-commerce risk insurance, the assets that need to be insured include digital assets (data) and intangible assets of customers.

2.Insured risks

Insured risks are risks that the insurance company accepts to insure and compensate the policyholder when a loss occurs.

Insurance companies typically divide insured eCommerce risks into three categories: First Party Financial Risk, Third Party Financial Risk, and Reputation Risk.

First-party financial risks are those risks that result in financial losses that are not claimed by a third party. Third-party financial risks are those risks that give rise to the insurer’s responsibilities and obligations to others. Corporate reputational risks are those risks that result in losses due to reputational and brand damage.

However, according to the AIG NetAdvantage Suite TM product ,

The following are E-Commerce risks covered by AIG.

1. Website Content Liability: Risks related to the content of Websites on the Internet include risks of copyright infringement, trademark infringement, intellectual property infringement, personal information infringement and negative reputational impact arising from the content presented on e-commerce websites.

2. Internet Professional Liability: Risks due to errors in professional Internet services such as providing Internet application services-ASP (Application Service Providers), providing Internet services-ISP (Internet Service Providers), network management and security services, server rental services, domain name registration, e-commerce transaction implementation services, online search services and electronic web portal rental.

3. Network Security Liability Insured computer network security risks include unauthorized access and use, theft or disclosure of personal information, spread of computer viruses or denial of service attacks. Indemnified losses only include losses resulting from third party lawsuits.

4. Information Assets Theft includes risks that cause losses to data, computer system resources and information assets such as credit card numbers, customer information, including bandwidth due to cyber attacks.

5. Identity theft risk , often caused by hackers breaking into personal computers, breaking secret codes and using the stolen identity for bad purposes. Victims are often famous and wealthy people.

6. Business Interruption risk due to the insured's computer network being down or suspended due to a breach of network security. The Insurance Company will compensate the insured for

lost income and other expenses incurred such as litigation and investigation costs as well as other related business interruption damages. In addition, the costs to restore business operations are compensated by the Insurance Company up to a maximum of $100,000.

7. Cyber Exortion risks include the risks of being threatened with cyber or website attacks, transmitting viruses, disclosing information about credit card numbers, personal information... The Insurance Company will compensate for settlement costs with the extortionists and investigation costs.

8. Cyber Terrorism risk is clearly defined in the US anti-terrorism law and the 2002 Terrorism Risk Insurance Act signed by President Bush. Insurance companies will compensate for damages to both first and third parties including data damage and business interruption.

9. Risk of loss of reputation due to reasons such as denial of service attacks, disclosure of customer personal information... The Insurance Company will support an amount of $50,000 without any conditions.

10. Punitive, Examplary risks or being forced to pay compensation due to court or arbitration decisions.

11. Claim Risks for material compensation

or intangible such as public apology, instruction...

12. Risks of attacks (Computer Attacks Risks) on the website or computer network such as unauthorized access or use of the business's computer system, denial of service attacks, infection with viruses or computer worms.

13. Physical Theft of Data: theft of computer systems or hardware containing important information, transaction processing systems...

14. Criminal Rewards Risk for information or the arrest or conviction of cyber criminals…The Insurance Company will pay up to $50,000 for this risk unconditionally.

Currently, AIG NetAdvantage Suite TM insurance products are divided into 7

product types with different types of insured risks.

In addition, AIG also provides other high-quality services free of charge to insurance buyers such as the Internet or on-site assessment program on the level of cybersecurity of the business according to the ISO 177799 Cybersecurity Testing standard. This program is applied to businesses even if they do not buy Insurance. In addition, AIG's Technical Advisory Board is always ready to serve all customers.

This advisory board comes from the world's leading security companies. In addition, AIG also sells insurance for specific risks of each business with separate insurance contracts.

3. Insurance purchase procedures

Insurance companies create all conditions for businesses in need to access these special insurance services. For AIG, all procedures are extremely simple, customers can buy insurance via the Internet at the company's website: www.aignetadvantage.com or send a request to the company by post 16 . In summary, buying risk insurance in e-commerce includes the following steps:

Step 1 : Businesses wishing to purchase insurance send a request to the insurance company.

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Step 2 : The Insurance Company will contact you to arrange a work schedule and negotiate costs.

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Step 3 : The Insurance Company will send experts to assess the risk level in e-commerce of the entire business.

Step 4 : The business relies on the risk assessment to request the type of insurance product, and the insurance company advises on choosing the most suitable product or insuring specific risks.

Step 5 : The two parties officially sign the insurance contract 17 .

4. How to calculate insurance premiums, liability limits, liability period

For E-commerce Risk Insurance, determining the insurance value is a very difficult task. Because the assets or objects

16 Insurance application forms are included in the appendix.

17 Insurance contract samples are included in the appendix.

The insured objects are intangible assets and their value is always changing. However, what both the insurance buyer and the insurance seller are more interested in are the types of risks insured, the liability limit and the liability period. Therefore, determining the insurance value is no longer necessary.

4.1 Insurance premium

Insurance premium is the amount of money that the insured must pay to the insurer to be compensated when a loss occurs due to risks agreed upon by both parties.

Insurance premiums are usually calculated on the basis of the probability of risks causing losses or on the basis of loss statistics to ensure compensation is paid and profit is made.

For E-Commerce Risk Insurance, Insurance companies often rely on surveys and assessments to divide the activities of Insurance buyers into three groups of activities with different risk levels: low-risk activities, medium-risk activities and high-risk activities.

At the same time, the Insurance Company also determines the probability of two main types of risks: first-party compensation risk and third-party compensation risk. The probability of first-party compensation risk is based on the probability of statistically calculated risks such as the probability of intrusion, the probability of information theft, etc. The probability of third-party compensation is calculated based on the claim rate for the insured or businesses in the same industry as the insured.

Combining the above two factors, the Insurance company and the insurance buyer can negotiate and come up with a reasonable fee rate for both parties. According to statistics from the US risk consulting firm Betterley, the fee rate

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