Considering the latest news reports about web cyber-terrorists attacking corporate websites, it is perfectly natural to question how well the conventional general liability insurance policy protects online businesses. Needless to say, the response to this question is "not well". The fact is, unless your policy clearly incorporates a comparatively-new type of coverage known as cyber insurance, you are likely completely unprotected against the special types of exposure that exist when conducting web-based business.

What are the Most Commonly Seen Internet Liabilities?

Historically, most of the risks connected with an internet business presence were related to intellectual property law. Having said that, as e-commerce becomes increasingly innovative, new internet legislation is enacted, and a larger variety of businesses use the web as their preferred medium for communication, a broader array of new liabilities must be considered by insurance companies.

Intellectual Property Right Infringement

The advertising injury protection contained in traditional general liability insurance plans does protect against intellectual property violation, libel, and slander lawsuits, but the manner in which these liabilities are defined is a little different under internet law. As a result, many business owners have found out the hard way that their company's existing policy did not cover the types of common liabilities inherent to the internet.

For example, infringement on the internet may range from an honest misstep like using another company's trademarked name in the site's meta-tags, to unknowingly using a trademarked picture on one of your webpages. It's highly unlikely that a normal CGL (Commercial General Liability Insurance) policy would cover against these types of claims.

Libel and Slander

Just like IP infringement, ordinary CGL policies do include advertising injury coverage against libel and slander. However, internet law yet again defines these aspects of defamation so that lawsuits coming from the internet are generally not covered. What's more, this part of internet law is changing fast and can be radically different depending on your location.

Just to illustrate, internet slander claims based on company sites that include negative reviews of their competitor's product or services have typically been tossed out by U.S. courts, but an internet blog writer in Taiwan was deemed liable for defamation in June 2011 after writing that the cuisine was "too salty" at a local restaurant.

Privacy Matters

The type of internet privacy invasion that most-typically lands in court happens when somebody's personal information is either distributed without their approval, or outright stolen. Because of the legally ambiguous situations where this type of activity often occurs in an internet setting, however, this poorly-defined area of internet law is frequently omitted from basic business liability insurance policies.

Knowing local internet laws is vital where privacy issues are concerned too. To illustrate, some online publishers have found themselves engaged in litigation after sending out unsolicited e-mails simply because they didn't know that their local lawmakers had enacted an anti-spamming law.

Transmitting of Viruses, Hacking, and Denial of Service Intrusions

Intrusions by hackers on your company website, or unintentionally sending out harmful computer worms to clients and associates might bring your online business to a standstill in only minutes. Even though these distinctive electronic threats hold very real consequences for loss and damage claims by or against your business, they are seldom covered in any kind of detailed manner by run-of-the-mill general liability policies.

Adding to Your CGL with Cyber Liability Insurance

Despite the fact that cyber liability is an extremely new form of insurance, many insurers offer it as a supplement to your company's general liability insurance policy. This internet-specific kind of coverage is written to clearly shield you from the kinds of online risks mentioned in this article, and take care of any expenses arising from losses, damages, and attorney's fees. Whether your business has a significant online presence, or a modest one, the reality of the Information Age is that you have to protect it with some form of cyber liability coverage.