Personal lines insurers encouraged to consider policy exclusions related to cyber-bullying and “electronic aggression”

In an age of “electronic aggression” on the Internet — cyber-bullying, for example — insurers may wish to consider excluding personal injury, bodily injury or property damage from personal lines (homeowner) policies.

Swiss Re held an online discussion about the impact of social media on personal lines insurers on Mar. 22. The discussion referenced a 2011 report by Swiss Re, The impact of social media on personal lines.

The report notes that prior to the Internet age, “insurers were safe from a profit and loss standpoint to provide personal injury coverage as part of a personal umbrella policy for little or no premium.” But times have changed because of new exposures arising out of the Internet and mobile communications.

One example of a new exposure would be a non-supervised teen “cyber-bullying” another through a social media website, perhaps convincing the victim to commit suicide.

Based on the above and other “personal injury” scenarios related to online and mobile communications, personal lines insurers might want to consider aggregate limits for personal injury coverage, as well as electronic media-related policy exclusions, the Swiss Re reports says.

For example, insurers might “consider adding an exclusion that excludes any ‘bodily injury,’ ‘property damage’ and ‘personal injury’ arising out of electronic communication and any claim for damages of negligent supervision arising out of electronic communication,” the report notes. “Including only the term ‘bodily injury’ could exclude cyber-bullying suicide-related claims.”

In addition, personal lines insurers might want to consider adding exclusions for “electronic aggression” (cyber-bullying) to both the homeowner personal injury coverage endorsement and to the personal umbrella policy.

Insurers might also consider excluding any claim for damages of negligent supervision arising out of electronic communication, the report says.

This is intended to address a situation in which adults are accused of not properly supervising their children, allowing the children to be engaged in some form of online aggression.