Internet Banking Liability­­

The Internet Banking Liability Policy provides broad electronic banking coverage for Losses arising from Wrongful Internet/Electronic Banking Acts.

Key Definitions

Wrongful Internet/Electronic Banking Acts are any actual or alleged omission, error, misstatement, misleading statement, neglect or breach of duty committed in connection with the provision of Internet banking services.

Wrongful Internet/Electronic Banking Acts may involve:

Invasion of privacy;
Libel, slander and defamation or other actionable oral or written disparagement;
Loss or damage to electronic data of a customer;
Denial, impairment or interruption of service to a customer;
Loss of business opportunity by a customer;
Unauthorized access to a customer account;
Infringement of copyright, misappropriation of ideas or plagiarism;
Infringement of trademark, trade name or service mark; or
Other causes of action arising directly out of the provision of Internet banking services by the financial institution.

Covered Losses include judgments, settlements and defense costs which the financial institution and/or its directors, officers or employees are legally obligated to pay as a result of a claim made against them.

Social Networking Coverage Endorsement (not available in AK and NY)

The Social Networking Coverage Endorsement is included in the Internet Banking Liability policy at no additional cost to cover exposures associated with "social media" and "social networking." The bank is indemnified for losses from claims brought by regulatory agencies, or brought by or on behalf of customers. Coverage includes Regulatory Correction Expenses incurred as a result of the bank's social media or networking activities.

Cyber/Network Extortion Endorsement (not available in NY)

The Cyber/Network Extortion Endorsement indemnifies the bank for loss of property surrendered by the institution as a direct result of threat to:

Damage the bank’s computer system through use of or access to an Internet Web site or private computer;
Cause an interruption of the bank’s Internet banking services;
Publish, utilize or disclose confidential information obtained from the bank’s computer system or from an Internet Web site; or
Commit theft of money or other property for which the bank is legally responsible through the use of or access to the bank’s computer system.

Business Interruption Endorsement 

The Business Interruption Endorsement indemnifies the bank for loss arising from the interruption of its business operations due to the failure or impairment of a Web site as a result of malicious activity. Causes of interruption may include:

Unauthorized access to electronic data within a computer system owned by the bank;
Attack by hacker or computer virus resulting in loss of service;
Inability to provide proof of origin or deliver data necessary to provide Internet services; or
Intentional limitation of access to the Web site in response to an extortion threat.

Coverage includes:

Loss of Business Income, paid at a predetermined per hour rate for the amount of time by which the period of interruption exceeds a predetermined waiting period; and
Extra Expense incurred to continue business operations, including the addition of temporary employees to service customers on-site, and costs of establishing the amount of loss.

Liability Mitigation Expense Endorsement (not available in NY)

The Liability Mitigation Expense Endorsement indemnifies the bank for extra expense incurred to retain a public relations consultant, in response to negative publicity involving the provision of Internet banking services.

In the case of unauthorized access to confidential customer information, this endorsement also covers the costs to notify customers, change account numbers, reissue plastic cards, and provide basic credit monitoring services for customers.