In April 2002 a German railway sued Google for linking to a Web site that provided instructions for sabotaging rail systems. The case has been bogged down in jurisdictional disputes, but a growing number of similar lawsuits are awakening U.S. businesses to the perils of putting information online.
Although there have been no significant monetary awards for damages, the insurance industry has been quick to seize upon the opportunity. Chubb, AIG, and the St. Paul Companies are among the first to introduce special “Internet liability” policies designed to help clients pay settlements or damages if they’re sued for posting or linking to material that infringes copyrights, is defamatory, or violates privacy rights. “Companies may not be considering the fact that there is a liability they are carrying just by including links to other people’s Web sites,” says Bill Rohde, president of global technology underwriting at the St. Paul Companies.
So far, most companies aren’t buying. For one thing, U.S. courts are still deciding whether standard liability policies implicitly cover Internet risks. At Marsh and McLennan, a New York Citybased insurance broker, dozens of clients have some form of Internet insurance, according to Norm Jacobi, managing director and chief technology officer of the firm’s technology and telecommunications practice. Still, he says, for most companies “the real interest is in controlling the underlying risks” by safeguarding private data, altering linking policies to avoid legal complications, and educating employees about security threats. And that may be the best way to ensure that liability fears don’t slow the Internet economy.
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