New Policy Offered To Cover Tech Risks
Risk managers and insurance agents may have clients at risk if those organizations have Web sites or employees who send e-mail, according to an online broker support organization.
"Information we have from different analysts suggests that 90 percent of businesses today use e-mail," said John Wurzler, a vice president at Safeonline, which this month will announce SafeBusiness, a new first- and third-party policy for small-to-medium-sized firms using basic technologies whose general liability coverage excludes technology risks.
Mr. Wurzler continued that legal liability can be created when someone within an organization defames someone in an e-mail, uses copyrighted material in an e-mail that infringes on someone's intellectual property, or performs either of these activities on a Web site. "Those company legal liabilities can subject the company to substantial losses," he said.
SafeBusiness will include coverage against first-party damage to electronic data held on computer systems. It also will cover liability claims for content on a companys Web site or sent in an e-mail message, according to Safeonline, located in Okemos, Mich., in the United States, and in London, United Kingdom.
According to Safeonline, coverage includes claims for inadvertent virus transmission as well as liability for e-mail and Instant Messages sent for non-work related purposes. Limits will be up to $1 million for third-party liability cover and up to $75,000 for first-party damage.
"The majority of smaller businesses are uninsured against their new digital risks, but the fact is they dont realize it," warned Mr. Wurzler. "Businesses are blindly putting themselves at the brink of financial ruin every time an employee sends e-mail."
Most businesses to some extent are involved with the Internet and e-business, he said. Whether organizations are conducting complex transactions via the Web or simply sending e-mail, they have new exposure to loss.
Until recently, he said, insurers have failed to "positively acknowledge the new coverage needed, but they hadnt positively excluded it," Mr. Wurzler explained. "Now that we know that traditional policies wont respond to a claim, businesses are suddenly finding themselves with a large gap in their insurance coverage that agents must help address."
Though many standard commercial insurance policies now contain exclusions that explicitly invalidate coverage for exposures in relation to the use of technology, "millions of dollars worth" of an organizations data and intellectual property is exposed, Mr. Wurzler said.
Safeonline urged agents to inform clients about coverage lost under existing commercial policies and to offer clients advice about their options. Safeonline said it has developed a new Agent Information Pack for the SafeBusiness policy.
The Pack includes information to help agents identify and explain gaps in existing coverage to their customers, the company said. It also includes examples of claims and loss scenarios, as well as a guide on how to approach different clients.
More information about the SafeBusiness Information Pack and other digital risk insurance products can be found by contacting the Safeonline Broker Support Center at 866-644-9477, or via e-mail at info@safeonline.com
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 15, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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