Internet-related losses are a cause of concern for many businesses. Such losses may arise from a number of different sources such as:

Systems failure
Computer viruses
Faulty software
Fraud
Hacking
"Theft" of websites

Indemnity cover is the most secure method of ensuring that your business does not unduly suffer Internet-related losses. The most common forms of insurance taken out by companies to cover any Internet losses are:

First party property coverage;
Commercial general liability insurance;
Directors and officers liability insurance;
Fidelity, surety and crime insurance; and
Employment practices liability insurance.

Today, the state of the law regarding other countries enforcing their laws against your web site is uncertain. Here are some practical tips to minimize risks:

When a person is going to buy from a company online, instead of asking them to fill in the name of their country, the company can have a drop list of countries to which this company has affirmatively decided to sell. While people can still view the company’s site in countries that aren't on the drop-down list, one can argue that the company has taken reasonable steps to avoid doing business in their country.

If a company is trying to exclude particular countries, another possibility is to have a pop-up window that says something such as, "If you are a citizen of countries X, Y and Z, it is illegal for you to order our products or view the material on this site." This is especially important because a first-time viewer doesn't know what they'll see on the website.

Still in its nascent stage is "geolocation" software. This type of software was originally developed to allow local advertisers to reach a local market. When it works right, it can tell the company the approximate location of a web surfer. The problem is that there are many things that can cause the software to miss the target by half a world. The problem stems from the fact that the Internet wasn't developed with the ability to trace geography as a goal. IP (Internet Protocol) addresses just weren't designed to make it easy to physically locate a computer when a user click on a link.

If a company is in a heavily regulated industry, like tobacco or alcohol, it should remember that regulations also apply online. If a company cannot take phone orders for wine from another country or state, it should assume that it cannot take a web order either. If one sells to a place where possession of what it is the company sells is illegal, the company might be committing a criminal act under their law by shipping it there.

Yet another approach is to localize your operation. If a business wants to sell to France, it could start a web site called, "YourName.fr." The company could then hire a local attorney to ensure that you comply with local law. Especially when used in conjunction with the other approaches, this might help them if they have to defend themselves in a foreign country.

This guide reflects the current status of activity happening within European legislation and is based on currently available best practice. However legislation and business models are rapidly changing in the world of e-business. Up-to-date legal resources should be consulted for new information and legal advisers consulted for detailed information and interpretation.