The digital economy has turned enterprise value upside down. Now, over 70% of enterprise value is comprised of intangible assets. These assets that are not physical in nature (e.g., formulas, software code, processes, etc.), but are identifiable, can be bought and sold, and have value.1 As such, intangible assets can be a source of competitive advantage and among the most valuable assets that a company owns.
Despite this growth, intangible assets are largely uninsured because:
- Standard lines of insurance generally cover tangible assets only
- Specialty line policies mostly cover IP rights and legal events and focus more on infringement liability risk, not property risk, and
- Generally, policies do not cover financial loss resulting from non-legal events directly impacting a broader range of intangible assets
Why does this coverage gap matter? Because there is a broad range of events that impact tangible assets. They can be damaged, destroyed, lost, leaked, or taken. In fact, recent studies show that 93% of organizations are concerned about insider risks and nearly one in four insider incidents involve intangible assets.2 With less employee oversight due to the rise of hybrid and remote work environments and with the decrease in employee retention rates, both accidental and malicious insider events pose greater threats to an organization’s intangible assets and an organization’s ability to safeguard that value to the enterprise.
Having the ability to quantify the financial impact of these risks on a company’s valuable intangible assets and to secure the needed insurance allows organizations to both manage threats to those assets and minimize the related financial loss.
