Two Different Types of Insurance Coverage

According to a number of insurers, the industry is adapting two traditionally distinct forms of insurance to serve the specialized needs of providers of on-line information.

On the one hand, there are specialty errors and omissions policies that have long been issued to companies such as data processing companies, database owners, and miscellaneous service providers. Originally, these insureds sought coverage primarily for intellectual property torts, negligence, and property damage (e.g., damage caused to the software or databases of their customers). But as these companies have branched into offering on-line information and interactive subscriber services, the insureds have sought endorsements on their policies to cover claims arising out of "content" -- such as defamation, trademark infringement, and invasion of privacy suits.

On the other hand, there are the familiar media perils policies that are available to newspapers, book and magazine publishers, and broadcasters. But as media entities have ventured into providing interactive on-line services and CD-ROMs, they have found that they need specialized add-on errors and omissions endorsements to cover the risks created by such activities as distributing software for use on personal computers.

In short, the needs of on-line publishers have brought about a convergence of the media perils coverage and specialized errors and omissions coverage, which had previously been distinct lines of business.

LINKS:

Return to Controlling Risks - Insurance for Cyber-Publishers

Novel Risks for Insurers and Insureds

The Increased Demand from On-line Providers for Insurance

Premium Structures

Indemnification