Technology and Cyber Risks
e-Commerce
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The e-commerce segment includes both e-commerce companies and content providers. For our purposes we define content providers as those organizations providing content over the Internet, such as portals, search engines and specialty providers of content, and e-commerce companies as companies transacting business over the Internet, such as companies existing only on the net and "clicks & mortar" companies. Typically these companies do not need professional liability insurance, but a package of coverages to protect them from unique Cyber Risks.
E-commerce coverage is complex and expensive. While specific policy forms vary for this new and evolving coverage, the form typically provides a package of coverages for Cyber Risks including both first party and third party coverages. In some cases risk management is a critical component of the coverage package.
It is critically important that the policy be reviewed by the applicant to determine if it provides the coverage desired. As the product evolves, each insurers' coverage provisions will change, and the applicability to the applicant's specific situation may change as well. The following are examples of what might be covered in an e-commerce policy.
- Fraudulent and malicious acts committed by either employees or third parties against the insured's computer systems
- Computer virus attacks which hinder or even close down the operations of the insured
- Accidental alteration or destruction to electronic information and records
- Loss of Intellectual Property when trade secrets are copied or recorded
- Extortion
- Business interruption & extra expense caused by a computer virus or other malicious acts
- Accidental or malicious destruction of electronic information
- Costs to mitigate a covered loss
- Multimedia liability such as libel, slander, invasion of privacy, infringement of copyright, plagiarism and false advertising.
- Liability for damage to a third party's computer system
Coverage can be provided for virtually any company involved in e-commerce or the Internet, although providing this coverage to financial institutions is quite difficult. Significant capacity is available, with limits of up to $50 million noted by some insurers. Minimum premiums can run as high as $25,000, but will probably be reduced as the product evolves.
Mercator Risk Services can provide you with e-commerce coverage for your growing internet and technology companies, and for traditional companies executing an e-commerce strategy. For assistance with a particular account or coverage situation please contact us at info@mercatorpro.com or see contact information on this website.
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