Security consultancy Counterpane Internet Security is offering customers of its managed security monitoring service the savings of 20% to 40% on insurance against the risk of losing revenue or critical information through network security breaches, the company announced Monday.
The insurance market of Lloyd's of London backs the two policies, covering e-commerce and Internet security,, the company said in a statement.
The Internet Asset and Income Protection Coverage policy provides insurance for loss of data, including customer lists and credit card records resulting from a breach of security or technology failure, while the Internet Asset and Income Protection Warranty Plan allows Counterpane's customers to extend the same guarantee to their customers in turn.
The insurers at Lloyd's will set prices for the insurance. Premiums will typically range from $20,000 to $75,000 for $1 million to $10 million of coverage. The actual premiums will be dependent upon the company's revenue and the level of risk involved, taking into account security infrastructure, procedures, industry hazard and scope of operation.
Underwriters can offer customers of Counterpane's monitoring service rates 20% to 40% lower than alternative coverage available in the marketplace, the company said in a statement.
But the insurance policies are no substitute for good security, according to Miles Johnstone, a director of London insurance arranger SafeOnline Ltd., which helped created Counterpane's insurance program.
Managed security services such as Counterpane's ease insurance underwriters' concerns about the level of risk they are taking on, according to Johnstone. "You have got to have a certain amount of technology in there for underwriters to accept the risk," he said.
However, "for start-ups without much money for protection technology, insurance can provide a valuable alternative," he said.
SafeOnline arranges cover for Counterpane's customers through RK Harrison Insurance Brokers Ltd. Only accredited brokers such as RK Harrison can place risks in the Lloyd's insurance market, although changes in Lloyd's rules mean that from Jan. 1, 2001, SafeOnline will be able to access the insurance market directly.
Counterpane Internet Security, in San Jose, can be found at www.counterpane.com/. SafeOnline, in London, is at www.safeonline.com/.
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