Column: Managing Risk in a Digital Age

The right policies can save your company from unwanted exposure

Today's technology has changed the way we do business – there is no question about that.   Almost every business has a website where it shows a product, builds brand recognition, tells a story or sells a service.

Companies now use internal and external e-mail systems as a primary source of communication.
With so many of these tools in place, has technology created a liability or exposure that was not there before? Let's look at some examples of what could go wrong:

    •    While e-mailing a customer, your employee inadvertently spreads a computer virus that causes a stoppage in productivity
    •    Sensitive client information is hacked into and compromised
    •    Your online store's security is compromised and client credit card information is stolen
    •    A third party feels you have infringed on their copyrighted material
    •    You have a rogue employee that creates a liability for the company through their internet communication

So what can business owners do proactively to protect against these risks? From a management standpoint, there are a number of steps that should be taken including:

    •    Build redundancy into your technology system
    •    Have clear policies and procedures related to company communication
    •    Encrypt sensitive information
    •    Manage the content of your website tightly
    •    Closely vet any third party online payment providers

While managing risk is a great first step, transferring that risk with an insurance policy should be considered. Cyber liability insurance has been around for more than 10 years and is becoming increasingly important as we continue to rely on technology solutions to reach our current and prospective clients. As federal and state mandated notification laws get stronger, the need for this coverage is increased. 

The strength of the internet and the ability to reach a wider audience increases both the opportunity for new clients and the need to protect what we build as business owners.

Tony Johnson is an accredited advisor in insurance and can be reached at Davidson Insurance, 360-514-9550 or

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