The future of cyber liability?

15 Sep 2020

Post Covid-19, reliance on online shaping the future of cyber liability insurance?

Cyber liability cover has developed as the fight against digital crime has evolved. However, Covid-19 has added a further dimension to the online picture. Remote working and the heightened is reliance on the internet has placed additional pressures on organisations to comply with laws governing digital content of all types. These new risks have increased and organisations now need to consider a more holistic form of cyber insurance cover, one that can cover the breath of 'content failure'

Digital risks are now part of everyday life. Data collection, use of personal information, data security, accountability and other issues are covered under privacy regulations. All too often, organisations are paying lip service to privacy rules, installing sub-standard cookie management software onto their websites. Worse, most do not fully understanding what they have installed or why they have installed it, and how they are exposing their organisation to unnecessary risk.

Copyright infringements throw up an additional risk for organisations. Copyright laws apply equally to online material as offline and, with the huge amount of easily accessible content, organizations can easily find themselves flouting the regulations – wittingly or unwittingly. US law provides a financial range of $200 to £150,000 for each work(1) infringed. The US copyright office received over 500,000 claim registrations(2) of all types in 2018, demonstrating the significance of this issue.

Accessibility adds a further dimension, one that we focus on in more detail within this piece.

ADA – impacting American society

The 1990 Americans with Disabilities Act (ADA) brought sweeping changes to the civil rights of those with disabilities. The Act protects against discrimination on the basis of disability and broadly protects the rights of individuals with respect to employment, access to state and local government services, transportation, and other significant areas of American life. Now, with more aspects of public life integral to the internet, focus has increased on the compatibility of websites and mobile platforms with the parameters of the ADA.

The ability for disabled people to partake in today’s economic marketplace can be inhibited by sufficient access to websites, which frequently offer lower prices, broader choice and easy-to-access information that those with disabilities may need more than others. The opportunity to visit stores without having to leave home should make the internet a convenient environment for those with disabilities, not a source of irritation.

The internet has also become a route to education for those who struggle to travel to school or cannot access education in traditional environments. Covid-19 has forced schools and universities, and other educational establishments, to offer online programs – something that may continue as the virus dissipates.

While businesses offering physical services understand the importance of accessibility for individuals with disabilities, their online counterparts are only beginning to become more aware of this issue. The result is that lawsuits against non-compliant website operators.

Complying with ADA regulations proving a challenge for website owners

Maintaining an ADA compliant website, and the content contained on it, requires owners to consider a variety of user needs. These include the ability to resize text, adding clear and consistent navigation/signposting, using headings or labels to describe the topic or purpose of content, embedding audio descriptions of content and providing captions for all live content.

At a more strategic level, however, organizations need to establish measures that enable them to maintain compliance over the long term, and especially where new content is added to the website. This includes staff training, supplier control and the ability to report quickly and easily. Failure to act according to guidelines can create additional, and unforeseen, liabilities. This commonly comes in the form of external law suites but internal issues can be problematic too. What happens, for example, if employees do not have the tools to manage digital accessibility correctly, leading to unnecessary time being taken to do the job? Worse, would be future claims if staff are dismissed due to poor performance but the organisation has not provided the tools to do the job.

Domino’s Pizza has been a recent high profile case but there are numerous examples of smaller organisations facing risk too. A number of retail bicycle business in California, for example, have recently been threatened by a law firm (3) representing a blind woman from California. The firm sought statutory damages of $4,000 per violation, plus attorney fees and other costs in total claims being from $8100 to $24900 – a significant sum for smaller organisations already suffering during the Covid-19 outbreak.

The global cyber liability insurance market is estimated will be with $21.4 billion (4) by 2025. Cover varies in scope but will generally protect against financial losses that result from data breaches and other cyber events. However, as the world becomes more dependent on the internet and content delivered digitally, additional digital risks are becoming more prevalent and need to be considered within this type of cover.

Further reading E-Audits: Protecting Your Rights and Assets While Minimizing Exposure https://shorturl.at/cfB45

(1) https://shorturl.at/qyIZ4 (2) https://shorturl.at/oqDQY (3) https://shorturl.at/asJNQ (4) https://shorturl.at/agrxE