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‘No fuss’ e-risk cover for SMEs

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Click For Cover, A Lloyd's underwriting firm, has unwrapped a "no-fuss" e-risk insurance policy designed for smaller businesses.

Called Club Esurance, the policy is designed for companies employing fewer than 30 people (including directors). It indemnifies businesses against losses and liability claims for up to £500K arising from email and the Internet. This policy costs £950 a year – there’s an excess of £2,500. For £750 a year you get cover for up to £250k, again with a £2,500 excess.

In return you get cover against:

Claims made by third parties for

  • Libel and slander due to e-mail or web site content
  • Breaches of confidentiality or rights of privacy
  • Misleading advertising, pricing or jurisdictional issues
  • Damage to their computer systems and/or records
  • Their losses as a result of your computer systems being inaccessible or as a result of you losing their data

Claims made by your employees for

  • An inappropriate workplace (e.g. sexual harassment due to e-mail content
  • Breaches of confidentiality

Claims for your own losses for

  • Costs incurred in repairing the damage caused to your computer systems and finding, replacing or restoring your computer records as result of a hack attack or virus
  • Ransom demands or threats to introduce a virus into your systems or to disseminate your data to third parties
  • Legal expenses incurred in the enforcement of your intellectual property rights on the internet
  • The cost of a public relations consultant to mitigate the damage to your reputation as a result of any loss that is covered under the policy

This sounds like a bargain to us – although, admittedly, The Register, as a news publisher, gets quoted somewhat higher rates for professional indemnity than most organisations of equivalent size. And we get more than 10,000 visits a month, the cut-off point for the policy. Also if your Internet presence requires mission-critical uptime, then this policy is not for you. And there is a long, long list of risky businesses which are not wanted:

Application service provider, aviation, broadcasting, domain name registration, gambling, casinos, insurance company, internet portal, internet e-market place, internet service provider, internet host, pension funds, petrochemical, pharmaceuticals, pornography, publishing, internet search engine, stock broker or trader, TV or radio, retail banking, investment banking and any activities relating to video or audio other than solely the retail sale of video or audio material or equipment that has been produced and distributed by others.

Phew! Professional indemnity insurance can be hard to find when you are a small business of any kind. It can be even harder to obtain when you are a small business trading on the Internet. Insurance companies don't like risk and they don't like the Wild Wild Web.

According to DTI figures cited by Click for Cover, fewer than eight per cent of UK SMEs were, in 2002, specifically covered for e-risks. At very least, businesses should examine existing professional indemnity policies to ensure that they are covered for e-risk. If not, Click for Club Esurance is worth checking out.

You can contact the company for more info on 0870 770 1002, or by email here. ®

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