Insurance industry giant American International Group, Inc. (AIG) is introducing a series of comprehensive liability insurance offerings that are designed expressly for e-commerce companies.
AIG’s netAdvantage Pro will provide coverage for companies that provide traditional products and services via the Internet, or companies that service e-clients. Coverage will be offered for claims arising from acts, errors and omissions in the insured’s computer and Internet services.
Coverage will also be included for allegations of infringement, libel or slander resulting from media services.
A separate plan, AIG netAdvantage, will be offered to companies that use the Web for such advertising as banners and home pages. The program provides coverage options based on the degree the insured company does business on the Internet.
Protection for these companies will be provided against allegations of defamation, libel, slander, infringement and invasion of privacy that arise from content published on the Web.
Defense costs for actions alleging damages and those seeking injunctions or non-monetary relief, as well as investigations and settlements, will be covered. Limits of liability for both plans is $25 million (US$).
Comprehensive Coverage for E-Businesses
AIG is also unveiling further insurance innovations for e-businesses, including coverage against such unknowns as viruses. The company’s new netAdvantage Pro+ is intended to provide the coverage of the other two plans, as well as additional coverage for ISPs, browsers and portals.
Coverage will be extended to include virus transmission, unauthorized access or use, and loss of service arising from allegations of acts, errors or omissions in Internet services, such as Web site design or hosting.
A New Wave of E-Business Insurance
Although highly innovative, AIG’s move is not the first in the insurance industry to aim at e-businesses. Late last year, INSUREtrust.com entered the market with a plan to indemnify companies that do business on the Internet.
The Atlanta, Georgia-based firm provides liability coverage for Internet companies against anything from computer crashes or malfunctions to hackers that break through networks and cause loss of data or money. INSUREtrust’s policies also protect against copyright infringements on Web sites and lawsuits from customers whose shipments were lost or whose privacy was violated.
It even covers the company if a disgruntled employee shuts down the system. For an annual premium of between $5,000 and $250,000, companies can buy coverage of up to $25 million a year.
Before a company can be insured by INSUREtrust, it has to pass a security inspection by a former Pentagon employee. Some companies have already been turned down for policies due to inadequate security systems.
While traditional businesses consider insurance a standard part of doing business, e-businesses have mostly been financially responsible for any claims against them. The recent moves by AIG and INSUREtrust.com may be a sign that e-commerce is taking on new credibility with insurance companies.
AIG recognizes that many of its newly insured companies will be doing business on the Internet for the first time.
“These new coverage programs enable insureds to create liability protection specific to their needs,” said Kristian P. Moor, AIG Executive Vice-President, Domestic General Insurance, “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.”