Premium Structures

While insurers vary in their approaches to structuring premiums, at least one describes the following progression of premiums reflecting a perception that publishing content posted by subscribers carries a heightened risk:

• If the publication merely puts its printed content on-line, there is no additional premium.
• If the publication provides more content on its on-line service than in its printed publication, the insurer will examine the insured's claims history. If it is favorable, there will probably be no additional charge for the additional content.
• If a publisher includes interactive features in its on-line service, such as chat rooms, bulletin boards, or interactive letters to the editor, there may be a substantial increase in the premium.
• Full-fledged on-line services, which provide content of their own, interactive content from subscribers, and a wide variety of content from third parties are regarded as sui generis, and policies and premiums are customized to fit their particular activities.

Not all insurers are currently charging higher premiums to publishers who include interactive features. But all are at least considering that approach, particularly in the wake of the Stratton Oakmont decision.

As a general matter, insurers are concerned about the difficulties of evaluating the risks associated with the tradition of uninhibited speech on the Internet, the anti-copyright mentality of would-be hackers and cyberpunk wannabes on the Internet, and the practical difficulties associated with attempting to screen thousands upon thousands of postings on bulletin boards and chat lines. Many deplore the prospect of a legal environment in which cyber-publishers may heighten their risks by taking steps to monitor content or promote civility. Media perils insurers have always preferred insureds who have a demonstrated history of exercising care. A case like Stratton Oakmont threatens to turn that thinking upside down.

LINKS:

Return to Controlling Risks - Insurance for Cyber-Publishers

Novel Risks for Insurers and Insureds

The Increased Demand from On-line Providers for Insurance

Two Different Types of Insurance Coverage

Indemnification