Novel Risks for Insurers and Insureds

Among the as yet unresolved questions facing insurers of on-line publishers are the following:

1) In the wake of Stratton Oakmont v. Prodigy, 23 Media L. Rptr. 1794 (Sup. Ct. Nassau Co. 1995), Playboy Enterprises v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993), and Frank Music Corp. v. CompuServe Inc., 93 Civ. 8153 (S.D.N.Y. 1993), will insurers charge higher premiums to service providers that allow individual subscribers publicly to post computer bulletin board messages, to engage in real-time "chat," or to publish other "content"?

2) Will cases like Stratton Oakmont give rise to the perverse result that publishers who (in the interests of promoting civility) exercise some degree of editorial control over content posted by subscribers actually end up paying higher insurance premiums?

3) How will insurers respond to the fact that material published on the Internet is instantaneously accessible in 146 countries throughout the world, potentially giving rise to claims in legal systems that accord little or no protection to robust public debate?

4) Will insurers demand that on-line services obtain indemnification agreements from all content providers and subscribers, as a condition of their insurance? (The major on-line services routinely obtain such agreements already.)

5) How successfully can each player in the distribution chain pass along the risk by means of indemnification agreements?

6) With the proliferation of new software patents related to digitizing and transmitting sounds, images, and text, should cyber-publishers obtain endorsements on their media perils policies providing coverage for patent infringement claims?

Some on-line publishers may also face the prospect of liability for how-to information that gives rise to personal injury or malpractice claims; for obscene materials posted by subscribers; or for failure to pay public performance licensing fees arising out of music or video materials exhibited on-line.

LINKS:

Return to Controlling Risks - Insurance for Cyber-Publishers

The Increased Demand from On-line Providers for Insurance

Two Different Types of Insurance Coverage

Insurance Coverage for Particularized Content

Premium Structures

Indemnification