To address the growing concern around threats now associatedwith Web 2.0, Hartford Financial Products, an underwriting unit ofThe Hartford Financial Services Group Inc., has announced a newliability product, CyberChoice 2.0.

Web 2.0, while it has many definitions, is a broad termdescribing the next phase of Internet development, includingtechnologies such as blogs and other forms of onlineinteraction.

According to Hartford-based HFP, the new product "providesbusinesses with a robust, technology-related insurance policy thatgoes beyond traditional business insurance."

Information sharing among Internet users via Web-basedcommunities such as social-networking sites has become a realliability threat for many organizations, businesses anduniversities, said HFP.

"We saw that in the marketplace of business risk, thetraditional business insurance policies were no longer sufficientbecause they did not grant coverage or were too vague," said DrewBartkiewicz, vice president of Cyber and New Media Risk at TheHartford. "In other words, business insurance has not kept up withthe risks of emerging technology-related exposures, which now cannegatively impact businesses, large and small."

CyberChoice 2.0 includes both errors and omissions andfirst-party coverage designed to help meet the needs of companiesthat recognize their technology exposure and information risks, thecompany said.

Organizations with personally identifiable information include:health care, financial services, retail, manufacturing, education,legal and media. In addition, miscellaneous companies such as dataprocessors, application service providers and e-commerce companiesmay have an increased cyber exposure.

Such coverage is needed, Mr. Bartkiewicz noted, because new lawsfor data privacy compliance have "mushroomed" with "an increase inthe number of data privacy incidents and indications that this areaof business risk will get worse [for companies] before it getsbetter."

"Cyber risk is an unavoidable, but very real, part of theInternet economy that has created new liabilities and businessexposures," said Mr. Bartkiewicz.

"As Web 2.0 is becoming more mainstream, so are the businessrisks of privacy, media and online advertising. This is especiallyan issue as companies experiment with initiatives where the userscreate the potential new media liabilities associated with Websites, including social networking sites. This is the most dynamicarea of the economy, and the most legally uncertain in terms ofdoing business."

The Hartford said key features of CyberChoice 2.0 include:

o Third-party coverage for data privacy and network securityliability; Internet and electronic media liability; andprofessional services liability.

o First-party business interruption coverage in the event of anetwork security breach.

o First-party cyber extortion coverage for threats against dataand identity theft.

o Intellectual property coverage for advertising and technologyproducts.

o Reimbursement for expenses related to responding to a majorprivacy event.

Some examples include notification of affected parties, costsfor managing the crisis, data privacy regulatory fines, costassociated with credit monitoring, and investigation of the eventby outside experts.

Up to $10 million in coverage limits are available.

According to Mr. Bartkiewicz, specific threats addressed by thiscoverage include: organized hackers, targeted virus attacks, datatheft of personally identifiable information, network interruptioncausing either a liability or a first-party business interruptionor loss of revenue. Also covered are risks associated withuser-created content and data on companies that deploy Web 2.0technologies in their company Web sites.

"In the last decade alone, personal data has become a valuedcompany asset for businesses in the United States and abroad," hesaid. "With companies doubling their data volume every year and newregulations on the horizon, experts predict the problem of datarisk will continue to threaten businesses--and that the likelihoodthat a company or organization will experience a data breach willincrease exponentially."

According to Mr. Bartkiewicz, the product has elicited"exceptionally high" early interest from brokers that place thiscoverage. Many chief information offices, chief financial officersand chief marketing officers "now recognize that technology aloneis no longer sufficient as a solution to cyber risk and liability,"he observed.

"Cyber risk will continue to rapidly take form and evolve intonew shapes as the business world continues to see the intersectionof law, risk and technology innovation."

Asked about agents' reactions, he said, "Some agents/clientsrecognize the risks. Some are anxious to learn, which is why we seeeducation of agents and customers as one of our primary goals forthis rapidly emerging line of business."

"The result of all this is simple," he stated. "Businessinsurance will never be the same again thanks to the new frontiersof the Internet, software automation and digitally dependentbusiness culture. We are just scratching the surface."

CyberChoice 2.0 is available via The Hartford Financial Productsunit.

Further information is available at www.hfpinsurance.com.