THE SPIDERIN THE WEB
PART 3--INSURING INTERNET EXPOSURES
By Diana Kowatch, CPCU, AU, AAM, CPIW dianak@in.net
In earlier articles we have looked at some of the spider bites (hazards and exposures) involved in doing business on the Internet. In this concluding article in the series, we will look at some of the insurance protection that is currently available to cover cyberspace and Internet liability. This list is not all-inclusive. Most of our information was derived from Internet searches, responses by our customers to the previous articles, or from information from organizations that have announced their products publicly.
Provided is a brief recap of what is being offered.
Insurance Providers
American International Group (AIG), New York, New York
AIG has developed InsureSite--insurance protection for exposures that might be encountered by operations that conduct business on the Internet. Coverage is for the insured's liability from a third-party's loss of money or electronic funds resulting from theft of credit card data while doing business at the insured's Web site. Limits may be purchased up to $250,000.
Also covered is personal injury caused by electronic communication of information from an insured's Web site or unauthorized access to that site. Protection is for libel, slander, and defamation of character. Limits are available up to $1 million.
A third coverage offered is insurance for property damage to an insured's computer equipment, electronic data, and storage media caused by vandalism, computer virus, and other specified perils. Any resulting business interruption also is covered. Available limits start at $50,000.
This information was obtained from a news release at the AIG Web site (located at http://www.access.aig.com/), and a footnote indicates that more information may be obtained by calling (800) 892-9779.
Chubb, Warren, New Jersey
Offered coverages are for technology business including property/general liability, machinery breakdown, multi-media liability, electronic data processing, and E&O.
Contact (800) 36 CHUBB or
fax: (908) 903-2027
The Chubb Web site is located at
http://www.chubb.com/
Employers Reinsurance Corp. (ERC), Overland Park, Kansas
Offers protection through a communications liability policy for businesses open to libel, slander and copyright infringement resulting from publishing or advertising on the Internet. More information may be obtained by calling ERC at (800) 255-6931.
The ERC Web site is located at http://www.ercgroup.com/
Media/Professional Insurance, Kansas City, Missouri
The coverage will pay sums legally obligated because of claims as a result of a wrongful act in performing insured services for others. Media/Professional offers limits from $250,000 to $5 million and excess limits up to $10 million total. Deductibles begin at $2,500.
Eligible risks include content providers, service or access providers, Web site developers, commercial on-line services, navigating or browser software developers, and advertisers, among others.
Media/professional insurance also offers a variety of comprehensive policies for media exposures including those experienced via use of the Internet.
For more information, contact Mark Hutchins, senior vice president, Media/Professional Insurance at (816) 292-7231.
Philadelphia Insurance Companies, Bala Cynwyd, Pennsylvania
Consultants' professional liability insurance--Philadelphia Insurance Companies writes professional liability coverage for management, marketing and computer consultants. The policy is designed to address exposures resulting from negligent acts, errors or omissions.
Coverage features include: pay-on-behalf insuring agreement; policy allows for insured consent to settlement; coverage provided for groundless, false or fraudulent allegations; definition of a claim includes arbitration proceedings; predecessor firm coverage provided; coverage extends to independent contractors; wrongful acts not imputed to innocent partners; free 60-day discovery clause; extended reporting period; and prior acts coverage available for qualified applicants.
(610) 617-7900 or fax: (610) 617-7940
URL: http://www.phlyins.com/
St. Paul, St. Paul, Minnesota
Offers a technology commercial general liability protection form which was broadened last year. It provides coverage for businesses that conduct commerce electronically, including the Internet.
(612) 310-2883
URL: http://www.stpaul.com/ or
e-mail:kim.oconnell@spcmail.
stpaul.com
Brokers or Managing General Agents
2CE, Paris, France
For information on worldwide coverage contact:
Ph: 33 01 44 95 80 00 or
fax: 33 01 45 62 02 05
URL: http://www.2ce.com/ or e-mail:
infor@2ce.com
Frederick John Fisher, Insurance and Surplus Lines Broker, California
Provides access to E&O insurance for computer consultants and programmers including Web service providers. This program is available in California by a California insurer. Program also offers coverage for unintentional copyright and trademark infringement coverage. Worldwide coverage for claims brought in the USA. Limits available up to $5 million.
(310) 665-1106; fax: (310) 665-1116
URL: http://www.insweb.com/mgas/fisher/ or e-mail: fjfisher@pipeline.com
Hamilton Dorsey Alston Co., Atlanta, Georgia
InsureSitesm--refer to AIG.
Contact: Steven Haase, CPCU
3350 Cumberland Circle, Suite 100
Atlanta, GA 30339
(770) 850-6670; fax: (770) 850 9375
(888) WEB RISK toll-free in the USA
http://www.webriskins.com
Morefar Marketing, Inc., Wilmington, Delaware
InsureSitesm--refer to AIG.
Contact: John Foerster
501 Carr Rd., Suite #101
Wilmington, DE 19809
(302) 761-5600
fax: (302) 761-5659
Stuckey and Company, St. Louis, Missouri
SafetyTek: Underwriting targets include: Internet service providers (e.g., America On Line and Prodigy), software companies, electronic bulletin board systems, computer and Internet consultants, computer security firms, computer repair companies, technical support businesses, and virtual corporations.
SafetyTek delivers all-risk property protection, with capacity ranging to $2.5 million or more. The covered property includes computer equipment, peripherals, bridges, telephone switch gear, hard drives, modems, routers and fax machines. Computer coverage incorporates system breakdowns. Coverage can be arranged for property in transit and property off premises. Other covered property exposures are loss of income; care, custody and control for other peoples' property or data; computer viruses; and computer hacker-related theft and vandalism.
The professional liability product can cover a broad array of exposures resulting from negligent acts, errors or omissions on the part of computer and technology professionals in the performance of their professional services. Optional coverage for copyright infringement is available subject to eligibility.
General liability limits run $300,000, $500,000 and $1 million. Up to $2 million in excess can be obtained to follow SafetyTek's own primary coverage. Computer and technology services professional liability limits stretch from $100,000 to $5 million. Employers liability limits go to $500,000. Premiums start at $250 for $1 million in general liability protection. Stuckey and Company prefers to write SafetyTek packages, but it also can sell coverages monoline.
Underwriters use two Best's-rated companies: Cigna (A-) for computer and technology services professional liability and The Hartford (A+) for commercial auto, umbrellas, employers liability, general liability and property. SafetyTek coverage is available nationwide.
For more information contact Dwight Stuckey, vice president of Stuckey and Company, 100 Centre on the Lake, Lake Saint Louis, MO 63367; (800) 873-0228 or (314) 625-8875; fax: (314) 625-8897; Internet: www.stuckey.com/ e-mail: dwight@stuckey.com
Other Providers
The following also provide some type of cyberspace or Internet coverage but no detail has been provided:
The American Agency
P.O. Box 12070
Overland Park, KS 66212
(913) 661-0123; (800) 642-1872;
fax: (800) 642-1329
e-mail: aaiks@ibm.net
Cooney, Rikard & Curtin, Inc.
P.O. Box 59689
Birmingham, AL 35259-9689
(205) 870-7790; (800) 824-1709;
fax: (205) 879-3739
The Hartford
Hartford, CT
fax: (860) 547-6649
Web site location:
http://www.thehartford.com/
Surplus Insurance Brokers Agency
P.O. Box 749
South Bend, IN 46624-0749
(219) 287-2368; (800) 342-5706;
fax: (800) 578-7758
Providing coverage only in Indiana and Illinois. *
©COPYRIGHT: The Rough Notes Magazine, 1997