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An e-tailer brought suit against a Web designer for damages the e-tailer sustained as the result of the unauthorized access of its private data files by a "hacker". The suit alleges that the Web designer negligently designed the e-tailerīs Web site by not providing adequate safeguards to prevent such type of intrusion.

A Web site is a lawsuit waiting to happen


Attorneys who make their living defending Internet suits charge outrageously. Most suits involve intellectual property law. Many companies are unaware of the problem and are unprepared to cope with it.

Clearly, the Internet has become an essential operational feature of trade, despite the slump in Web-based commerce and the dot-com decline. Only a few years ago only 12 million persons were accessing the Internet but now this number is over 60 million and growing at geometrical rates. Many companies are establishing websites and communicate with others by means of e-mail, chat lines and bulletin boards. Some companies have started to promote and market products and services on the Internet. Liability rules that applied to advertising injury, libel, slander, infringement of copyright and trade marks will have to be reformed to comply with changing conditions of online communication.

What complicates matters is that the Internet is producing many exposures of unknown quantity, causing insurers frequently to introduce exclusions until they can get a better handle on what these exposures may produce.

Currently looming as a future battleground with insurance implications will be the question of who rightfully owns a particular domain name for a Web site. It is not unusual for one business to encounter another business with a domain name or a Website address similar enough to cause one or both of the parties to file suit.

Somehow, many people got the idea that if it was online, it was free for the taking, and that copyright laws do not apply. This is absolutely not true. If it's online, the same kinds of laws apply as in the real world. Copyright law is actually one of the easiest and most straight-forward areas of cyberspace law. You should not steal someone else's copyrighted material. Even if there is no copyright statement, you can still assume that the material is copyrighted and can't be distributed without the author's or copyright holder's explicit consent.

Some of the biggest court cases involving cyberspace copyright law have targeted service providers. Plaintiffs hurt by copyright infringement have claimed that service providers have a duty not to let subscribers steal copyrighted material. The concept is called “vicarious infringement” because the defendant did nothing but is considered by the plaintiff to be responsible for infringements of people who are its customers.

Many people still are unaware that a number of states have passed laws against advertisers sending out masses of unsolicited e-mail messages.


Cyber Internet Liability Threats

Threats can range from computer viruses, hacking, industrial espionage, and denial of service attacks, to errors and omissions in the provision of professional services. Sources of these threats may include alienated teenagers, criminals, competitors, professional service providers, or even your own employees. With your assets, data, and corporate reputation at stake, the identification and management of Information Security threats is more critical than ever.


Cyberspace Internet Liability Insurance


What is Cyberspace Internet Liability Insurance?

Cyberspace Internet Liability addresses the first- and third-party risks associated with e-business, the Internet, networks and informational assets. Cyberspace Internet Liability Insurance coverage offers cutting edge protection for exposures arising out of Internet communications.

The concept of Cyberspace Internet liability takes into account first- and third-party risks. The risk category includes privacy issues, the infringement of intellectual property, virus transmission, or any other serious trouble that may be passed from first to third parties via the Web.

The fastest changing area of liability today is cyberspace liability. The rapid explosion of individuals accessing the Internet in the past few years has spurned the interest of businesses who are interested in promoting and marketing their products and services over the Internet. Cyberspace refers to the digital world represented by computer technology but more particularly to the access to the vast flow of information available on the Internet.


When do I need Cyberspace Internet Liability Insurance?

Anyone with a Web site now has the legal liabilities of a publisher.

The Internet-that technological wonder of worldwide communication-has spun a whole new "web" of liability exposures.

Creating a Web site is simple. The exposures that come with it are not. Privately owned companies that venture onto the World Wide Web face liability exposures that are emerging, evolving, and complex.

Commercial companies that disseminate information to the public via Web sites face the same legal exposures as publishers, yet most have little or no concept of their resulting legal responsibilities. Moreover, new legislation continues to create potential liabilities, particularly in the areas of user privacy and domain name infringement.

Businesses involved in setting up websites as well as anyone who disseminates information to the public, need to consider new risk scenarios such as:

  • Infringement of intellectual property rights
  • Breach of confidence or infringement of privacy
  • Misuse of any information which is either confidential or subject to statutory restrictions of use
  • Defamation
  • Inadvertent transmission of a virus

Why do I need Cyberspace Internet Liability Insurance?

Traditional liability products do not address Internet exposures and the risks involved in Internet business have blossomed with the Net itself. That is why you need Cyber Internet Liability Insurance from InsureCast.

By disseminating information to the public via a website, commercial businesses now have some of the same exposures as publishers. These include conventional publishing exposures such as copyright infringement, defamation and invasion of privacy, as well as emerging exposures related to operating on the Web.

Traditional insurance policies may not be enough. Think of the potential for trouble:

  • A copyrighted image is displayed on your company’s web site without the image owner’s permission
  • You find out too late, that your company web site’s domain name has already been claimed by someone else
  • The metatags used on your company’s web site are trademark names owned by another company
  • Your company’s new web site accidentally includes unfavorable remarks about your competitors
  • An outside third party is able to access your customer’s propriety information through your site

The universe of potential plaintiffs is staggering, given the number of people and organizations that are currently surfing the Net, a potential legal action from just one of them could be costly. In a 1999 case, a company improperly used a sports celebrity’s name and photograph on its web site, and the celebrity sued for the “fair market value” of his name, plus additional damages of $750,000. Clearly, the potential liability associated with web site content is already great, still growing, and rapidly evolving.

For a company operating in today's high tech world, your computer network will more than likely provide internal and external email. You will probably have your own web site providing information about your company, its products and services with even the possibility of e-commerce.

InsureCast delivers risk management advice and services tailored to your specific needs. Our experts also identify and tackle your risk when weighing risk management in tandem with performance and global regulations competition. InsureCast provides Cyberspace Internet Liability insurance for technology companies.

Please go to our online CoverageCoach questionnaire to get a free no obligation Cyberspace Internet Liability Insurance quote.

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