Nasdaq Security Breach Highlights Cyber Threat

The company that owns the Nasdaq Stock Market over the weekend confirmed that its computer network had been hacked, according to a report in today’s Wall Street Journal.

An application called Directors Desk that allows corporate board members to share confidential documents was targeted. Nasdaq OMX issued a statement on the breach here.

According to the WSJ, the security issues with Nasdaq have triggered broader concerns:

People familiar with the Nasdaq case say that while the specifics of that hacking aren’t particularly egregious in a world where corporate networks are attacked daily, the case has raised alarms in the government because of the potential implications of compromising Nasdaq, which runs one of the world’s most-important exchanges.†

The incident highlights the fact that  network security  breaches remain a top threat facing businesses.

In its recently published Global Risks Report 2011, the World Economic Forum (WEF) identified cyber-security as one of the top five risks to watch.

The WEF warned that the complexity of cyber security issues is still not well understood and its risks could be underestimated:

Cyber security encompasses online data and information security and critical information infrastructure breakdown, and ranges from petty online theft by disenfranchised youths to government-led provocations with potentially catastrophic consequences.†

All of this reminds us of the potentially enormous liability facing businesses when a data breach occurs. Specialized cyber risk insurance coverage is a key purchase to help businesses manage this risk.

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