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The Who, What, & Why of Cyber Liability

Who Needs Cyber Liability Coverage?

Any communications company engaged in providing computer services, Internet services or those companies using the Internet in its everyday course of business.

What Activities Create Cyber Risk?

  • Use of Email
  • Support of Webmail
  •  Internet Service Providers
  • Dependence on Network Services
  • Electronic Storage of Customer Information
  • Storage of Third-Party Trade Secrets  and Data
  • On-Line Advertising and Marketing
  • Web Site Design, Development & Ecommerce
  • Web Site Activities (Content, Links)
  • E-Commerce
  • E-Brochures/E-Catalogs
  • E-Bill Payment
  • Internet/Digital Media
  • Electronic Bulletin Boards or Social Interaction

Why Does My Customer Need Cyber Coverage?

A General Liability policy will cover a physical injury to tangible property. Information is not tangible property. A General Liability policy also excludes electronic data.

Claim Examples:

Trademark Liability
ISPs are liable for their own activities that constitute trademark infringement. As a result, if an ISP were to advertise their services under a trademark that is confusingly similar to a mark of another party (such as Netcomp, IBMLink, or CompuService), they would be exposed to charges of trademark infringement. In addition, if an ISP’s own web page contained the trademarks of another, the ISP’s use of those marks would be analyzed like another web page owner.

When one of their customers misuses a trademark of another, the ISP may very well face possible liability under the theory of contributory trademark infringement. Much like contributory copyright infringement as discussed in the Netcom case above.

Security Breach

A Company’s network security is breached by a hacker allowing them to gain access to the company’s
customer transactions and private information. The hackers use the information they have stolen to
illegally purchase items and obtain loans. The customer sues the company to recover their expenses
occurred to repair credit and discharge illegal loans. The banks also sue the customer to recover their costs to notify customers and reissue credit cards.

UNITEL is considered one of the leading insurance agencies for handling the complex needs faced by communication and technology companies across the country. We are the telecommunications and technology insurance specialists. Contact us to learn more how we can improve your risk management program and increase your profitability. UNITEL can help you learn more about cyber liability and data breach insurance.