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Professional liability has among the highest degrees of exposure among all lines detailed in Best's Underwriting & Loss Control Resources report Online Betting Operations. Loss Control On-Site Inspection: - Does the insured have a wired or wireless computer network? - Does the insured keep its own computer servers on the premises, or is this service contracted out to a third-party (i.e., cloud computing) provider? * Is there live dealing on the premises? - What are the age, construction, and condition of the insured's building(s)? - Are hazards posed by any adjacent buildings? Items To Investigate: - Does the insured store valuable information on a computer network that can be accessed through the internet? * How does any third-party cloud service provider hired protect the information that it stores for the insured on its servers? - What type of agreement does the insured have with its cloud service provider should there be a security breach? - What quality control measures are in place to ensure the website is operating fairly and correctly? - How large is the insured's electric load? -Anthony Bellano Scan or click for more information about Best's Underwriting & Loss Control Resources.
Best's Underwriting Reports and Best s Loss Control Reports provide insights into the risks and lines of coverage for online betting operations.
Cyber hackers are taking advantage of the online betting market becoming more widespread and lucrative. One of the latest examples happened during the summer when a major data breach targeting online betting platforms Betfair and Paddy Power affected up to 800,000 users, according to online tech news website TechRadar.
While no passwords or payment details were accessed, hackers were able to compromise users' IP addresses, email addresses and online activity related to their gambling accounts, increasing the odds that victims could become targets of fraud, according to the report.
It's becoming a liability issue, too. Professional liability has among the highest degrees of exposure among all lines detailed in Best's Underwriting & Loss Control Resources report Online Betting Operations. That's largely because the underwriter must investigate the legitimacy of an online betting operation that is seeking coverage.
The report cites a 2022 study that shows there are numerous indications that a betting website is not legitimate. "A major tipoff, specific to the United States, is that the website is based offshore and advertises, 'All U.S. Players welcome," the report said. "This is because online sports betting is not legal in all 50 states. Unfamiliar domain names and the absence of the seal of the state's online gaming platform should raise suspicions that the domain is not a regulated site."
"Special exposures include cyber criminals and the need to strictly follow governmental regulations related to these operations, and to keep the website up and running around the clock," AM Best said in the report. "Other special exposures can include system damages, lost data or business revenue and breaches of confidentiality, along with online theft."
Best's Underwriting Reports has identified nine lines of coverage for online betting operations: Automobile Liability; General Liability: Premises and Operations; Professional Liability; Workers" Compensation; Crime; Property; Business Interruption; Inland Marine; and Cyber Insurance.
Best's Hazard Index ranks the risk of exposure for the lines of business as Low (1-3), Medium (4-6), High (7-9), and Very High (10).
Following are excerpts from the Online Betting Operations report that show the highest index rankings, as well as the information about MSCI's Casinos and Gaming ESG Risk Intensity Score as of Sept. 24, 2024:
Lines of Coverage
Cyber Insurance
Because online betting operations conduct virtually all of their customer interactions and other business via the internet, their Cyber Insurance Liability exposure will be serious. Online betting enterprises could experience system damages or outages, which would suspend the entire operation. The vast amount of valuable personal and financial data stored for online betting websites will attract cybercriminals, both external and internal. Other exposures include "cyber vandalism" (i.e., hacking or other system incursions or disruptions by non-legitimate users), or the introduction of computer viruses. Business identity theft, including the creation of a duplicate website to divert confidential information to a hacker, could be another hazard.
Professional Liability
The overall Professional Liability exposure for online betting operations will be substantial. The expertise and proper training of the insured's staff members responsible for the integrity, design, and smooth operations of these websites will be crucial in ensuring the entire enterprise performs properly. This will include the technical, compliance, and customer relations staff. These websites must operate in accordance with legal requirements; proper licensing must be obtained, and any updated regulations must be implemented. Staff members must know how to meet the regulatory requirements across state (and sometimes international) lines. The insured's gaming experience and the proper intake and distribution of funds especially will depend on the qualifications of the technical experts and financial staff operating the website. To note, online casinos and sports betting websites will need to function properly around the clock.
Loss Control
On-Site Inspection:
- Does the insured have a wired or wireless computer network?
- Does the insured keep its own computer servers on the premises, or is this service contracted out to a third-party (i.e., cloud computing) provider?
* Is there live dealing on the premises?
- What are the age, construction, and condition of the insured's building(s)?
- Are hazards posed by any adjacent buildings?
Items To Investigate:
- Does the insured store valuable information on a computer network that can be accessed through the internet?
* How does any third-party cloud service provider hired protect the information that it stores for the insured on its servers?
- What type of agreement does the insured have with its cloud service provider should there be a security breach?
- What quality control measures are in place to ensure the website is operating fairly and correctly?
- How large is the insured's electric load?
-Anthony Bellano
Scan or click for more information about Best's Underwriting & Loss Control Resources.
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