Does General Liability Insurance Protect Online Businesses?

Does General Liability Insurance Protect Online Businesses?

In light of recent news headlines about internet cyber-terrorists targeting corporation internet websites, it is only natural to question how well the standard general liability insurance policy protects online businesses. Not surprisingly, the response to this question is "not very well". The truth is, unless your policy specifically incorporates a relatively-new form of coverage known as cyber insurance, you're probably totally unprotected from the unique kinds of exposure that exist while conducting business online.

What Are The Most Commonly Seen Internet Liabilities?

Traditionally, many of the perils connected with an internet business presence were linked to intellectual property law. Having said that, as internet commerce gets more and more innovative, new internet legislation is enacted, and a significantly greater variety of businesses use the world wide web as their preferred medium of communication, a wider range of new liabilities must be looked at by insurers.

Intellectual Property Right Infringement

The advertising injury coverage included in standard general liability insurance policies does protect against intellectual property violation, slander, and libel lawsuits, but the way these liabilities are defined is somewhat different in internet law. Consequently, quite a few entrepreneurs have learned the difficult way that their existing policy did not include the forms of common liabilities inherent to the internet.

For example, infringement on the web may range from an innocent oversight such as using another company's copyrighted name in the website's meta-tags, to unknowingly placing a copyrighted image on one of your pages. It's extremely unlikely that a regular CGL (Commercial General Liability Insurance) policy would cover against these types of claims.

Defamation

Much like IP infringement, common CGL policies do contain advertising injury coverage against slander and libel. Unfortunately, internet law yet again defines these elements of defamation so that lawsuits coming from cyberspace are usually not covered. Additionally, this part of internet law is rapidly changing and may sometimes be radically different based on your location.

Case in point, internet defamation claims based on company sites that feature negative reviews of a competitor's products have typically been thrown out by U.S. courts, but an internet blog writer in Taiwan was found liable for defamation in June 2011 after simply writing how the cuisine was "too salty" at a nearby restaurant.

Privacy Matters

The type of internet privacy breach that most-frequently lands in court occurs when someone's personal information is either used without their approval, or outright stolen. As a consequence of legally unclear circumstances where this type of activity usually takes place in an internet setting, however, this poorly-understood area of internet law is often omitted from standard business liability coverage.

Knowing local internet laws is crucial where privacy issues are concerned too. As an example ,, some online advertisers have found themselves involved with litigation after distributing unsolicited e-mails simply because they were not aware that their state had approved an anti-spamming law.

Transmission of Malware, Hacking, and Denial of Service Intrusions

Assaults by hackers on your business website, or unintentionally passing on malevolent computer viruses to customers and affiliates might bring your web business to a halt in mere minutes. Even though these distinctive online threats carry very real consequences for damage and loss claims against or by your company, they are seldom covered in any sort of comprehensive fashion by normal general liability plans.

Adding To Your CGL With Cyber Liability Insurance

Although cyber liability is an extremely new form of insurance, a lot of insurers offer it as a supplement to your general liability insurance policy. This internet-specific kind of coverage is written to clearly protect your business from the kinds of online risks mentioned in this article, and cover any costs arising from losses, damages, and attorney's fees. No matter whether your business has a heavy online presence, or a small one, the reality of the Information Age is that you need to secure it with some variety of cyber liability coverage.

Darin Mendanor previously worked for 15 years in the insurance industry, and now enjoys sharing his unique insights and experiences through his site www.generalliabilityinsuranceonline.net. Whether your looking for information on the recommended minimum liability insurance for small business, or advice on the best way to buy public liability insurance, Darin's site has your needs covered.

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