Online threats have resulted in a significant financial hit for our website.
In a recent study conducted by market research firm Techconsult, commissioned by specialty insurer Hiscox, a significant discrepancy between the perceived risk and the actual damage figures in professional liability for online shop operators has been uncovered.
While many online shop operators consider the risk of professional liability claims to be relatively low, the study found that the actual damage figures are substantially higher than expected. This suggests that online retailers may underestimate the financial impact and likelihood of professional liability incidents, potentially leading to insufficient insurance coverage or risk management measures.
One area of concern is copyright infringements and unfair competition, which account for nearly a quarter (24%) of the total damage costs in online shop insurances. Product liability or claims for damages for personal and property damage, while considered low risk by 47% of online shop operators, account for 20% of damage cases and 27% of the total damage volume.
Cyber risks, such as business interruptions or misuse of customer data through hacker attacks, are also a growing concern. Only a third (32%) of online shop operators consider these risks to be a high risk for their own online shop, despite the fact that cyber attacks account for only 13% of all damages, but the trend is increasing due to the digitization of trade. In the Hiscox statistics, 95% of damages in the cyber area are already caused today by hacker attacks, which can be very expensive.
Interestingly, 64% of online shop operators demand coverage of cyber damages via an online shop policy, and 55% expect professional liability to be included in an online shop insurance. However, small businesses with a turnover of up to 150,000 euros are particularly affected by professional liability claims, and among companies with fewer than 10 employees, this figure was even 78%. Small businesses with fewer than 10 employees feel particularly secure about cyber risks: only 19% consider business interruptions due to hacker attacks to be a high risk, and 22% consider misuse of customer data to be a high risk.
The insurer warns that the trend of cyber attacks is visibly increasing and is expected to continue to rise in view of the digitization of trade. Online shop operators are therefore encouraged to review their insurance policies and risk management measures to ensure they are adequately covered for professional liability and cyber risks.
One area of demand from online shop operators is liability for purchased products within and outside the EU, with 42% wishing to include this in an online shop insurance. This highlights the need for insurance providers to offer comprehensive coverage that meets the needs of online retailers in today's increasingly digital world.
Online retailers might underestimate the financial impact and likelihood of professional liability incidents, potentially leading to insufficient insurance coverage or risk management measures, as shown by the significant difference between perceived risks and actual damage figures in cybersecurity and technology-related claims. Interestingly, while cyber risks are becoming more prevalent due to the digitization of trade, only a third of online shop operators consider these risks to be a high threat for their own business, indicating a need for increased awareness and investment in cybersecurity measures.
