When producers ask us to give a presentation to a group or to their staff about trends and exposures, one of the first things that comes to mind as a topic is the expanding risk in cyberspace.
The subject is appealing for several reasons.
1. The potential market is huge. Almost every company of any size has an internet exposure of one level or another, because almost every company has made itself a publisher through the company’s website. That exposure generally isn’t covered as well by a GL policy as it can be with an internet E&O form. We aren’t talking about just tech and internet companies but about companies in every industry.
2. The market has barely been penetrated. Much of the market has not yet recognized the exposure, or at least has not appreciated the exposure enough to purchase internet insurance coverage. Although not legally required like work comp and some other coverages, how many companies operate without GL or BOP coverage? In contrast, what percentage of companies carry internet E&O coverage today? Internet coverage may never rival GL in terms of market penetration, but the number of buyers seems certain to grow significantly.
3. Exposure on the internet is expanding. The expansion of cyberspace generates overall exposure growth. Malicious mischief continues to increase as it has for years, whether in the form of viruses, worms, DDOS attacks, security breaches, or other sundry ways. (There isn’t coverage for the perpetrators, but there can be exposure to and coverage for those who suffer losses because of it.) Expanded functionality of the internet brings greater exposures, such as the phenomenal growth of online commerce in the past five years and the growth of blogging in the past year or two.
Perhaps better than any other activity, corporate blogging exemplifies the fact that brick and mortar companies can turn themselves into publishers on the internet, and they sometimes do so without adequate recognition of the content and intellectual property risks that can come with publishing.
Corporate blogging has picked up enough momentum that a number of sites are now tracking them, trying to keep pace with this phenomenon. Sites tracking the development of company blogs include:
Corporate blogging liability exposures can be covered by insurance, as can many other exposures generated by activity on the internet. For more information about online exposures, see some of our previous posts: