E-businesses need electronic commerce insurance coverage

Electronic commerce insurance also is known as e-commerce insurance and protects online businesses that provide traditional services and products from the dangers of doing business on the Internet or providing services for companies doing business online. Insurance coverage can be had for claims arising from criminal acts and errors and omissions affecting the insured party’s Internet server and computer services.

Electronic commerce coverage also can protect against liability arising from defamation or accusations of infringement arising from services provided involving media. In some instances, separate types of e-commerce insurance plans are available for online companies that use home pages and banner ads, and some e-commerce insurance plans provide varying levels of coverage based on the degree to which a firm does business over the Internet.

Online companies that provide content on the Internet and Web can obtain important e-commerce coverage to insure against losses incurred by allegations of slander, libel, infringement and invasion of privacy that might occur when content is published on the Web. If legal defense costs are incurred, such e-commerce insurance plans can help pay the legal costs with liability limits of up to several million dollars available.

There are many uncertainties and potential perils when doing business online, and a good e-commerce insurance plan can help protect against damages caused by Internet viruses, worms and other invasive attacks that can cripple or wipe out a Web site and its owners. Losses caused by liability arising from accusations of errors or omissions, improper acts, or losses caused by faulty Web sites or hosting that result in a loss of service and revenue would be covered up to policy limits.

Some e-commerce insurance plans provide liability coverage to protect against malfunctions, computer crashes, hacker attacks and other perils that can cause financial harm to or even bankrupt an online business. Other kinds of e-commerce plans can protect against losses caused by infringement of copyrights on Web sites or against financial costs of lawsuits arising from lost shipments sent to customers or violations of privacy. Such e-commerce insurance plans also can protect against losses caused by angry workers, such as when one might delete a website or some other critical information.

To get e-commerce insurance protection, some insurance firms require stringent background checks before approving coverages for online businesses. But a number of large insurance companies are underwriting electronic commerce plans that mostly re new to the insurance industry.
“These new coverage programs enable insureds to create liability protection specific to their needs,” said Kristian P. Moor, Executive Vice-President of Domestic General Insurance, AIG. “Whether they are venturing onto the Internet for the first time, regularly transacting business via the Internet, establishing full-fledged dot-com enterprise or providing technology and content that are the backbone of these enterprises.”
With the Internet increasingly becoming a primary tool of commerce, having the proper type of e-commerce insurance coverage can help keep small and large businesses protected against the wide variety of perils arising from global Internet communications and transactions. By Mike Heuer