October 17th - 19th, 1999
Hyatt Regency Baltimore, MD

Emerging Liabilit and Regulatory Issues in
E-Commerce:
Alan Rutkin, Partner,
Rivkin, Radlar & Kremer,
Tuesday, October 19th, 10:00-10:50 a.m.

"Insurers Face E-Commerce Liability Questions "

As lawsuits stemming from e-commerce increase, insurers will have to solve questions of liability and coverage involving who's at fault, what's the problem and where's the jurisdiction for the case, an attorney said Tuesday.

Alan Rutkin, senior litigation partner with Rivkin Radler & Kremer, Uniondale, N.Y., told an audience at "Continuing the E-volution," A.M. Best Co.'s 12th annual insurance and technology conference, that in addition to facing questions of tangible and intangible injuries, insurers would be affected by the larger questions e-commerce litigation raises.

The question of who is at fault in an injury case arises from the difficulty of identifying the creators and owners of Web sites, Rutkin said. The Internet allows people to use false or incomplete names, he said, citing a lawsuit involving Columbia Insurance Co., in which a Web site sold products using trademarks Columbia owned. Columbia was unable to track down the owner of the site because it was registered with only initials, ZIP codes and area codes.

What people are suing about has changed to include new copyright issues, disclosure issues and privacy issues, Rutkin said. There are still many questions about whether employers can monitor e-mail. "People are incredibly creative in finding ways to get themselves in trouble with e-mail," he said.

Confidentiality issues are especially important to the insurance industry because it has so much personal data that can lead to disputes if released improperly, Rutkin said.

He also cautioned insurers to be sure they weren't violating copyright laws with information on their Web sites and to know disclosure laws in states where they do business. "Agents may need to disclose their license numbers on their Web sites," he said. "And Web sites may need to state that policies are for sale only in the specific states where the carrier has met regulations."

The question of jurisdiction affects insurers that use their Web sites to do business across state lines. There have been cases in which people who claimed injury from a Web site owned by a company in another state weren't allowed to bring the case to court in their home state, Rutkin said. The deciding factor seems to be the owner's intent for the Web site, he said.

Rutkin warned insurers to be aware of their vulnerability. "Losses from computer crime were estimated at $137 million in 1997, which seems low to me," he said.

Rutkin predicted that state insurance regulations would change to reflect the capabilities of the Internet in the next several years. "It only took them five or six years to accept faxing," he said.

Rutkin has special expertise in matters involving hazardous waste, asbestos and employment discrimination. He has written a defense litigation column for Best's Review magazine for eight years.

By Sally Whitney
Senior Associate Editor, Best's Review