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THIRD PARTY CLAIMS
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INSURING CLAUSE 1:
Claims made against you for internet or email libel
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Norwich Union paid Western Provident £450,000 in order to settle an action that an email at Norwich Union incorrectly alleged that Western Provident was about to be investigated by the Department of Trade and Industry.
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INSURING CLAUSE 1:
Claims made against you for breaches of intellectual property rights
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Easy Group sought compensation from 60 separate companies who had the word "easy" in their registered internet domain name. In one specific case Easy Group took legal action against easypeople.co.uk and demanded that they pay the fee of £100,000 for its legal costs in pursuing the matter.
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INSURING CLAUSE 1:
Claims made against you for breaches of confidentiality or rights of privacy,
(for example, a breach of the Data Protection Act)
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A list of more than 1,800 web users and their personal details has been left at www.ukshops.co.uk, an online shopping mall that directs buyers to well-known names such as Boots, Comet, Debenhams and Interflora. On display are users' names, email addresses, postal addresses, gender, and age group. Following the press's investigation, the UK Information Commissioner's Office has agreed to act on behalf of the thousands of consumers who have had their details exposed.
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INSURING CLAUSE 1:
Claims made against you for misleading pricing
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Kodak mispriced a top quality digital camera at £100 instead of £329. Not surprisingly, they received over 10,000 orders in a very short space of time. Following press coverage and the threat of legal action, Kodak honoured the contracts which cost them over £2,300,000.
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INSURING CLAUSE 1:
Claims made against you for jurisdictional issues
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Yahoo's litigation with the French courts over the availability of Nazi memorabilia on Yahoo's sites has lasted for over four years now.
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INSURING CLAUSE 1:
Claims made against you for internet or email libel
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Norwich Union paid Western Provident £450,000 in order to settle an action that an email at Norwich Union incorrectly alleged that Western Provident was about to be investigated by the Department of Trade and Industry.
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INSURING CLAUSE 2:
Claims made against you for any errors or omissions in the provision of technology services to your clients.
(coverage only offered if applicable)
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Client held software consultant accountable for failure of bespoke accounting system to work. Total loss exceeded £500,000.
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INSURING CLAUSE 3:
Claims made by your employees for an inappropriate workplace (for example for sexual harassment)
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Isabelle Terrillon successfully won £70,000 from her UK employer for sexual harassment due to pornographic emails being sent between her male colleagues.
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INSURING CLAUSE 3:
Claims made by your employees for breaches of confidentiality due to you misusing their data.
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British Gas were forced to pay over £200,000 to an ex-employee arising from comments circulated via the internet that breached his privacy.
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FIRST PARTY LOSSES
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INSURING CLAUSE 4:
The costs incurred in repairing the damage caused to your computer systems and finding, replacing or restoring your computer records as a result of a hack attack or virus
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A computer engineer who had been employed to update the computer system of a sheet metal company was fired due to incompetence. When the company refused to pay him, he hacked into its computer system and deleted their files. It cost the company over £70,000 to rectify the damage.
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INSURING CLAUSE 5:
Reinstatement of your lost revenue due to your inability to conduct trade electronically as a result of a hack attack or virus
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In an October 2004 UK court judgement, it was deemed that there was no cover for Tektrol's business interruption loss under their all risks policy, due to the Ôerasure of information on computer systems' exclusion. Tektrol's loss was due to the combination of a burglary and a virus.
Uninsured losses do not tend to be reported, but the 2004 DTI Information Security Breaches survey found that 1% of security breaches disrupted the company for more than a week and a further 1% for over a month.
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INSURING CLAUSE 6:
Your losses as a result of third parties using your computer systems to steal your money
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Citibank lost £6.25m to a hacker using an old computer in an accountancy office in St Petersburg. He was arrested in the UK and extradited to the US where he is now serving a prison sentence. The FBI has still not recovered £250,000 of the funds.
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INSURING CLAUSE 7:
Ransom demands or threats to introduce a virus or hack into your computer systems, or to disseminate the data you hold on your computer systems.
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A dismissed IT department employee encrypted the entire database of his previous company and then demanded £1,000,000 in ransom. The company were preparing to call his bluff, when it found out that not only had he actually succeeded, but that it would cost at least £5,000,000 in computer and employee time to undo the damage.
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INSURING CLAUSE 8:
Your legal expenses incurred in the enforcement of your intellectual property rights on the internet.
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Road Tech Computer Systems found that a competitor, Mandata, had been using Road Tech Computer System's registered trademarks as metatags on their web site. By doing this Mandata had ensured that internet traffic was diverted to them. Road Tech Computer Systems sued Mandata successfully and received £80,000 in compensation.
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