Types of Risks of E-Business

According to Marsh, Inc. a leading provider of cyberinsurance services to e-businesses, the following are most obvious types of risks for conducting online businesses:

Damage, Theft, or Disclosure of Electronic Information. Information security (data integrity, confidentiality, and availability) is critical to the expanding e-Financial Services industry. Sensitive transactions, such as customer payments via credit or debit card, health care information, etc. require a high degree of security and confidentiality.

Loss of Service. In cyberspace, the reasons for Web outages are largely the result of "intangible" or human events, and less likely due to uncontrollable causes such as fire or earthquake.

Authentication and Non-Repudiation. Especially in business to business e-commerce, both parties must be properly authenticated. A digital signature may be required to form a binding contract and two essential questions must be answered electronically: Can we with confidence confirm whom we are dealing with and can we prove that they did in fact make the transaction?

Computer Fraud. The costs of network/Internet fraud extend far beyond the fraud or crime itself. Financial losses alone may result from the need for network downtime while locating and fixing the security breach, the need for an emergency audit, public relations damage control, increased fraud insurance premiums, and loss of business.

Privacy. Concerns about privacy are increasing daily from regulators worldwide. The issue bridges confidentiality of information from a security standpoint and electronic protection of sensitive digitized data. The critical issue is protection of information from an identifiable person.

Malicious Code. Despite the advances in anti-virus software, this remains a serious global cause of data damage and destruction, disruption in service, and destruction of computer components.

Legal and Regulatory Uncertainty. At present, the extent to which banking, insurance, securities, and other laws will be affected by the Internet is largely unknown.

Intellectual Property, Content, and Advertising Infringement. Everything on a Web site can be copyrighted as intellectual property. Even business processes over the Web today can be patented. The Internet creates new exposures for content and advertising that are unlike any other medium; although it is complicated by lack of global uniformity in managing these issues.