Awareness of Liability Risks Growing: Keeping Your Site Safe

By Pelland, Dave | Risk Management, June 1997 | Go to article overview

Awareness of Liability Risks Growing: Keeping Your Site Safe


Pelland, Dave, Risk Management


Keeping Your Site Safe

Although businesses have been stampeding onto the World Wide Web, acknowledgment of the potential liability issues associated with establishing a Web site is developing more slowly. In the rush to create a Web presence, companies can easily open the door to a range of content-related and security exposures.

"Organizations involved in publishing and broadcasting have experience in mitigating many of these risks, but other companies have a harder time," says Lori Jorgensen, risk manager-worldwide products at Microsoft Corporation. "The attention paid to the Internet by the media has raised awareness, and it appears that organizations are taking a more reasoned approach as they contemplate using interactivity. However, the Internet impetus at most companies is provided by marketing groups, and companies face an inherent tension between marketing efforts and managing risk."

As they do with other exposures, Ms. Jorgensen recommends that risk managers apply a systematic approach to examining their organizations' cyberspace efforts. As a starting point, a risk manager should be familiar with the content of his or her organization's Web site and should get involved in developing or reviewing information in advance to point out and prevent the posting of inappropriate material.

"To help me apply the risk management process to cyber-risks, I've developed a checklist of risks encountered in an interactive environment that organizes these risks into three fundamental categories: liability risks, security risks and first-party risks," she says.

Liability exposures that can stem from a Web site's information include the use of unlicensed content; the misuse of another party's logos, trademarks or home page design; improper hyperlinks that give the appearance of an affiliation; or hyperlinks to content developed by other parties that may constitute infringement or defamation.

The use of third-party content (either created under contract by an independent provider or copied from other sources) can create direct and contributory liability exposures. In addition, organizations whose Web sites contain chat rooms or bulletin board sections that allow the public to post comments must monitor these messages to guard against defamatory allegations.

Ms. Jorgensen says the global nature of the Internet can also create liability and regulatory problems for organizations as content flows electronically across international borders. Many countries outside the United States have stronger traditions of regulating communications and may restrict political and commercial speech. …

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Awareness of Liability Risks Growing: Keeping Your Site Safe
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