NBC News reports that in six years there will be more than 30 billion internet-enabled devices, a huge increase from current levels. More and more products, from your refrigerator to your car to your coffeemaker, will be connected to the Internet.
While living in this futuristic dream world sounds nice, each connected device brings its own cyber liability. Any connected device is vulnerable to cyber attacks.
In fact, one security firm already demonstrated how easy it is to hack the so-called "Internet of Things." Cyber security experts at Proofpoint used malware to hack all sorts of connected devices, including a refrigerator. It's still unknown whether or not these hackers were also responsible for stealing your leftovers.
Smarter, More Vulnerable Devices on the Horizon
The same risks that plague laptops and mobile devices are present in the Internet of Things. Weak passwords and lax security settings all make it easy for hackers to break into your devices and home network.
Unfortunately, as consumers have more and more devices, hackers simply get more opportunities. Device security is a major issue. Will retailers be able to build secure devices? Will the simple software on your television, refrigerator, or other device be able to repel sophisticated hacks?
Rather than having a chain with one weak link, the Internet of Things could be a chain made entirely out of weak links. To make matters worse, a client of yours will no doubt use their work laptop on the same network as these vulnerable devices.
(For more on growing mobile device liabilities, see our article "The Mobile Future & Why You'll Need E&O in It.")
Is the Internet of Things for Real? (Yes, and It’s Filled with Risk)
From time to time, ideas catch on in the tech world. Tech journalists sometimes beat these ideas to death, writing article after article about smart watches, BitCoin, and other hyped topics.
But don't let this overexposure blind you to the fact that the Internet of Things is on its way. Mobile carriers are seeing massive growth in Internet-connected devices. Bloomberg projects that this growth will create a new demand for Internet service, which could add as much as $4 trillion of economic value over the next decade.
Businesses are already investing heavily in Internet-enabled devices. Google recently purchased Nest, a company that makes web-connected thermostats and smoke detectors. By all accounts, the business world is already sold on the Internet of Things. The only question is whether cyber security is up for the challenge.
Case Study: Did Interconnected Devices Cost Target $400 Million?
Interconnectivity just means more network vulnerabilities. Any one of these vulnerabilities can get costly. Take the case of the Target data breach.
How were hackers able to break into Target's customer records? Just like in the movie Mission Impossible, they went in through the air vents.
Hackers first attacked the heating and air conditioning company that serviced Target's building. Because the ventilation system was connected to Target's computers, Hackers were then able to break into the Targets network and plant malware on their sales systems. The rest is history.
So far, this "leak" in the ventilation system has cost Target hundreds of millions of dollars. According to the Wall Street Journal, compared to last year's totals, Target's profits were down by more than $400 million from December to February.
Technology Errors and Omissions: Coverage for Internet-Connected Devices
Whether you're building smart phone apps to connect customers to their Internet-connected home appliances or working as a system administrator for an office with numerous interconnected devices, you'll face a growing amount of professional liability.
The Internet of Things is exciting and its growth means more economic opportunity for developers, IT security consultants, and other tech professionals. But it also means more risk.
To learn more about the cost of Errors and Omissions and how it protects your business, take a look at our free sample insurance quotes.