STRIMA 2009 Annual Conference September 2009 Second Life

STRIMA 2009 Annual Conference September 2009 Second Life: Virtual Campuses, Real-World Risks Jean Demchak, Marsh, Inc. Global Education Practice Leader

What is Second Life? n A virtual world—This is not a game you can win or lose n Over 14 million “residents” n Has its own currency, the “Linden dollar” 2

What is Second Life? n Residents can purchase virtual land n Buy virtual products n Outfit their avatars in virtual clothing n And find things you can’t buy in the real-world 3

How Are Schools Using Second Life? n n n Schools can purchase “Private Islands” Many schools create virtual versions of their real-world campuses Virtual classes in virtual classrooms taught by the avatars of real professors – Architecture and urban studies classes can actually build and test designs – Sociology or psychology students can experiment with race, gender, and sexuality issues, by modifying their avatars – Harvard Law School conducted mock trials with virtual juries and verdicts 4

Which Schools Are Using Second Life? n At least 170 accredited educational institutions, including: – Harvard – Princeton – MIT – NYU – Stanford 5

The Key Risks and Liability Concerns n Cyber-Assaults, cyber-bullying and even cyber-“rape” – “Griefers” – “Virtual” Shooting at Ohio University’s virtual campus n n n Tort Liability? Violations of Second Life’s Code of Conduct and Terms of Service Off-Campus Problems / Policy Issues 6

The Key Risks and Liability Concerns n n Intellectual Property and Copyright Issues Property Disputes and Property Damage – Princeton vs. MIT – Bragg vs. Linden Research , Inc. 7

Educators Legal Liability n 70% of claims are Employment Practices Liability n Claim cost – 68% Legal defense – 32% Indemnity n Potential expansion – Internet: E-hate mails; Harassment / bullying; E-stalking – Economic impact on layoffs, – Program cutbacks and closures – Federal regulatory expansion of ADA, etc. 8

Cyber Risks: 2005 -2008* n Breaches of Privacy: 180 – Medical Centers: 25 n Records: 6 Million n Type of Loss: – SSN, Patient Records, Credit Card – Stolen laptops/theft n Cost associated with breaches – Recovery of operations – Identity theft (credit card / SSN#) – Patient information *Serious Events Study, Kroll Fraud Solutions, 9

2008: Incident Breakdown by Type* TYPE 2007 2008 Unauthorized disclosure 38% 44% Theft 28% 23% Penetration 22% 20% Employee Fraud 1% 6% Loss 9% 5% Impersonation 2% 2% *Serious Events Study, Kroll Fraud Solutions, 10

Web-related Risks n Privacy Issues – My. Space – Facebook – File sharing – Downloading unauthorized material n EPL-type Claims – Hate mail – Cyber bullying – E-stalking – Harassment 11

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Litigation: Reality vs. Virtual? n Colorado University Settlement – Two women sexually assaulted at off-campus party – $2. 5 million settlement against school n University of North Carolina Settlement – Former female soccer player alleges harassment and sexual discrimination – $385, 000 settlement and revision of sexual harassment policies and procedures 13

Minimizing the Risks n n Perform a Thorough Assessment and Inventory Understand the Technology and The Terms of Service Educate Your Students and Faculty Sit Down With Your Broker (Or If You Are A Broker, With Your Insured) n This Is a Unique Opportunity – Be Proactive n Get Involved 14

Questions? 15

Contact Information Jean Demchak, Managing Director Global Education Practice Leader Marsh, Inc. One State Street, 19 th Floor Hartford, CT 06103 860 -723 -5635 Cell 860 -805 -0677 jean. demchak@marsh. com 16