The Economic Case for Cyberinsurance
Jay P. Kesan
University of Illinois College of Law
Ruperto P. Majuca
University of Illinois at Urbana-Champaign - Department of Economics
William J. Yurcik
University of Illinois at Urbana-Champaign - National Center for Supercomputing Applications (NCSA)
SECURING PRIVACY IN THE INTERNET AGE, Stanford University Press, 2005
We present three economic arguments for cyberinsurance. First, cyberinsurance results in higher security investment, increasing the level of safety for information technology (IT) infrastructure. Second, cyberinsurance facilitates standards for best practices as cyberinsurers seek benchmark security levels for risk management decision-making. Third, the creation of an IT security insurance market redresses IT security market failure resulting in higher overall societal welfare. We conclude that this is a significant theoretical foundation, in addition to market-based evidence, to support the assertion that cyberinsurance is the preferred market solution to managing IT security risks.
Number of Pages in PDF File: 32
Keywords: Cyberinsurance, liability, internet securityAccepted Paper Series
Date posted: August 18, 2004
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.703 seconds