Insurance for e-commerce Web sites, protection against loss from malicious crackers and unstable equipment, is an acknowledgement that digital disasters can cause as much damage as any physical calamity. The policies cover break-ins and theft as well as the downtime that can cost a site business, such as the numerous failures that plagued eBay last year. If you had a breach of security at your Web site and your Web site revenue stream was interrupted for 12 hours, your regular insurance policy wouldn't cover that loss because you had no loss during that breach.
Traditional insurance covers only physical loss and the net loss of doing business.
For example, if a storefront suffers a fire and can't operate for five days, the insurance company will reimburse the policyholder for five days worth of net income. The owner of an uninsured Web site is out of luck. WiSP reimburses policy holders for lost sales and ad revenues while a Web site is down, although the figures are adjusted for sales from alternative sales channels, such as an 800 number or mail order. A site that earns all of its revenues online would be fully reimbursed. There are real-world considerations, however.