ASPIC Unveils ASP Insurance
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The ASP Industry Consortium today announced the availability of a new insurance program, developed specifically for ASPs in conjunction with insurance brokerage InsureHiTech, to provide comprehensive protection against the risks inherent in Web-based enterprise.
Coverage is provided through AIG netAdvantage, a product suite from American International Group Inc. (AIG), the leading U.S.-based international insurance organization. Developed in conjunction with the ASP Industry Consortium, the coverage is available to any application service provider, though ASPIC members will receive a significant discount as a benefit of membership.
"This new insurance program is an extraordinarily valuable benefit for our members - one that fills an important need for them, as well as their customers," said Paula Hunter, ASPIC chairman. "It provides ASPs with access to comprehensive protection against any of the risks to which they could be exposed in the course of their business. At the same time, it gives ASP customers an added measure of security that should enhance confidence in the ASP delivery model and ultimately accelerate its adoption."
The coverage provided by AIG netAdvantage addresses several potential risks faced by an ASP, including:
- Media liability coverage: Protection against liability arising from Web content, such as libel, slander, invasion of privacy, and copyright or trademark infringement.
- Professional liability (Errors and omissions): Protection against wrongful acts committed in the performance or non-performance of Internet, professional or technology-related services.
- Security liability: Protection against computer attack, unauthorized access, unauthorized use or malicious code.
- Extortion coverage: Protection against threats to commit an intentional computer attack or other security breach for financial gain.
- Asset and income protection: Protection of an ASP's data assets and business income in the event of a covered security breach.
- Criminal reward fund: Reward monies up to $50,000 for information leading to the arrest and conviction of a cyber criminal.
- Crisis management fund: Coverage of up to $50,000 in public relations expenses relating to a claim covered under the policy.
"As insurance specialists for technology industries, we understand the issues that ASPs face in providing a comfort level to their clients," said Rick Maloy, CEO and president of Princeton, N.J.-based InsureHiTech. "Working with AIG to tailor the best solutions for the association made this a truly compelling offer to the membership. We look forward to serving the association and being a valuable business resource for their constituency."
Participants will have two coverage options, one designed to complement any existing Errors and Omissions coverage and which includes Errors and Omissions coverage. Premiums will be determined by several factors, including the size of the ASP's assets, its existing security measures, its technology, and its policy limits and deductible. Policy limits will range from $1 million to $25 million, with policy deductibles starting at $50,000.
"Recent ASP customer interviews indicate that data security and backup contingency plans are among their top concerns," said Meredith Whalen, vice president, ASP, Internet and Consulting Services Research for analyst firm IDC. "ASP insurance could be the necessary catalyst to transform the potential end user into a loyal customer."
In addition to offering discounted liability insurance to members, the ASP Industry Consortium plans additional insurance-related initiatives. These initiatives include sponsorship of annual ASP security seminars that will include an insurance component and feature panel participation by InsureHiTech and/or AIG; as well as periodic publication of white papers and insurance-related articles within the Consortium Web site or member newsletter.