In light of the recent news headlines about online hackers targeting corporation websites, it is only natural to wonder how well the typical general liability insurance policy safeguards online businesses. Of course, the answer to this question is “not well.” The fact is, unless your insurance policy specifically incorporates a fairly new kind of coverage known as cyber insurance, you are likely completely unprotected against the special kinds of exposure that occur while doing web-based business.
What Are the Most Common Internet Liabilities?
In the past, the majority of the liabilities associated with an internet business presence were tied to intellectual property law. Having said that, as e-commerce becomes increasingly complex, new internet legislation is introduced, and a greater variety of companies use the web as their primary channel for communication, a broader array of new liabilities have to be evaluated by insurers.
Intellectual Property Right Violations
The advertising injury protection contained in traditional general liability insurance policies does safeguard against intellectual property violations, slander, and libel claims, but the manner in which these liabilities are treated is a little different in internet law. Consequently, many business owners have learned the hard way that their company’s existing policy did not protect against the types of common liabilities found on the internet.
As an example, infringement in the online world ranges from an honest misstep like using another company’s copyrighted name in your website’s meta-tags, to unknowingly placing a trademarked graphic on one of your pages. It is extremely improbable that a normal CGL (Commercial General Liability Insurance) policy would protect against these types of claims.
Libel and Slander
Similar to IP infringement, ordinary CGL plans do contain advertising injury coverage from libel and slander. However, internet law again defines these elements of defamation in such a manner that claims originating from the internet are generally not covered. Additionally, this area of internet law is changing rapidly and may sometimes be drastically different depending on where you live.
Case in point, internet defamation claims founded on company sites that feature negative reviews of a competitor’s product or services have usually been tossed out by U.S. courts, but an internet blog writer in Taiwan was deemed liable for defamation in June 2011 after simply writing how the food was “too salty” at a nearby restaurant.
The kind of internet privacy breach that most-often lands in court occurs when someone’s personal data is either shared without their permission, or outright stolen. Due to the legally ambiguous situations where this type of activity sometimes occurs in an internet setting, however, this poorly defined area of internet law is usually omitted from standard business liability coverage.
Being aware of local internet laws is critical where privacy issues are concerned as well. To illustrate, some online marketers have gotten themselves involved with lawsuits after distributing unsolicited e-mails because they were unaware that their state had passed an anti-spamming law.
Transmitting of Malware, Hacking, and Denial of Service Attacks
Intrusions by hackers against your business internet site, or unintentionally passing on malicious computer worms to clients and affiliates might bring your online business to a halt in only minutes. Although these unique online threats hold very real repercussions for loss and damage claims against or by your business, they’re almost never covered in any sort of comprehensive fashion by run-of-the-mill general liability policies.
Adding to Your CGL with Cyber Liability Insurance
Although cyber liability is a new kind of insurance, many providers offer it as a supplement to your business’ general liability insurance policy. This internet-specialized type of coverage is written to clearly protect your business from the kinds of online incidents mentioned in this article, and take care of any expenses stemming from damages, losses, and attorney’s fees. Regardless of whether your company has a major online presence, or a small one, the reality of the Internet Age is that you should secure it with some kind of cyber liability coverage.