There are three risk precepts that guide decisions we all make in business and profession, as well as our personal lives:
(1) never risk a lot to save a little
(2) never risk more than you can afford to loose
(3) always know your odds
We use these precepts unconsciously, to make a multitude of decisions daily. As has been the case for hundreds of years, the conclusive risk management tool for the exposed, is insurance.
Digital risks are real-time. Business faces 24/7 online risk exposures that can decimate a company financially. How one plans for these contingencies is a measure of the quality of privacy and security protection from a risk viewpoint of loss.
"More than ever before, firms are using devices to exchange information faster and over longer distances and the growing use of technologies supporting this trend" - such as handheld devices and Voice Over IP (VOIP) give rise to new risks. As a result, corporations and IT directors must constantly seek solutions to stay ahead of potential risks arising from these emerging trends. Insuring digital assets is the practical answer.
The valuation of intangible data assets. E-mail, for example, is the most pervasive form of communication and impacts every aspect of every organization. Companies produce billions of e-mail messages more than ever need to be retained, searched, recovered, and more important never lost.
World' accounting standards, including the IRS (RIAA) have identified a need for the valuation of intangible assets for the purpose of balance sheets. The movement toward convergence to IFRS are financial reporting rules that have been developed by the London-based International Accounting Standards Board (IASB), recently have become widely mandated, adopted or emulated in over 100 countries, most notably, for publicly held companies within EU member nations.
The fact that insurance industry is willing to accept and insure the risks that companies face with intellectual property, and that lenders face from collateralized loans, provides external evidence that an intangible asset has value. If a company chooses to insure its intangible data assets, disclosure of the insured values provide useful information to creditors and investors. The value they are willing to insure business continuity can be used for purposes of lending, borrowing, or financial reporting. Such disclosures bridge the gap between reported values and operating market values.
In the long run, external evidence could help allow internally developed intangible assets to be included in financial reports. Initially, companies might voluntarily report these appraised values in the notes to their financial statements. If research determined that disclosures were useful to investors, and if the valuation costs had already substantially been incurred, then FASB could consider recognizing those values directly in financial statements.
The bottom line valuation of a company is potentially valued based on the overall risk due to business' operation continuity and the potential recovery cost for data loss. Insuring electronic data is key to the valuation of a company's net financial worth. CloudCover is third-party, real-time data valuation.
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