RAA Insurance FAQs
Published 30 September 2015
Q1. What is Commercial General Liability insurance?
A1. Commercial General Liability (CGL) insurance is a common form of insurance in the United States and certain other parts of the world. It generally pays for obligations incurred if an individual is injured on the insured's property or when the insured or one of the insured's employees causes property damage or bodily injury (more information). In some cases, CGL insurance may also cover claims of false or misleading advertising and copyright infringement.
Q2. What did the Registrar Accreditation Agreement require?
A2. Since 1999, the terms of the Registrar Accreditation Agreement have required registrars to maintain Commercial General Liability (or similar) insurance during the term of the agreement with policy limits of at least US$500,000.
Q3. Were the RAA insurance requirements based on a specific ICANN Policy?
A3. Yes. The Statement of Registrar Accreditation Policy, adopted in 1999, states that applicants for accreditation must:
"[o]ffer to agree to have, and demonstrate an ability to obtain, commercial general liability insurance in effect during the accreditation period in an amount sufficient, given the registration volume reasonably projected by applicant, to provide domain-name holders reasonable compensation for losses caused by the applicant's wrongful covered acts. A policy limit in the amount of US$500,000 or more will be deemed sufficient, although a lesser limit will be accepted upon a showing that it provides for reasonable compensation in the circumstances."
Q4. Why is ICANN waiving the requirement?
A4. This waiver is the product of more than 18 months of research, analysis, and community consultation. ICANN began exploring potential changes to the insurance requirements for registrar accreditation in response to complaints that the requirement impeded entry to the registrar marketplace in developing countries, particularly in Africa and South America. ICANN sought public input on this topic in May 2014, as part of a broader inquiry into potential challenges facing the registrar market in developing regions.
ICANN concluded based on this review, a public inquiry process, legal analysis, and consultation with an outside insurance expert experienced in the technology sector that the CGL insurance coverage provided for in the RAA did not appear to address the type of protection that might benefit domain name holders.
ICANN solicited a second round of public comments in January 2015 proposing the possibility of waiving the requirement. During this second round of public comments there was no evidence presented that a registrant has ever made a claim against a CGL policy. Taking all of these factors into account, ICANN decided to waive the requirement in the RAA. Some commenters supported a waiver of the requirement, while others suggested that ICANN replace the CGL requirement with one that provided more meaningful protection for registrants. ICANN notes that although the Accreditation Policy presently authorizes ICANN to reduce the CGL insurance requirement, substitution of a new insurance requirement might require modification of the Accreditation Policy through the Policy Development Process.
Q5. Will the elimination apply to all registrars and prospective new registrars?
A5. Yes. ICANN is waiving this requirement for prospective and existing registrars. This waiver will apply automatically—a registrar will not have to take any action to qualify for it. Registrars may wish to continue to maintain CGL (and other) insurance voluntarily, but ICANN will no longer request proof of insurance at the time of accreditation or during contractual compliance audits.
Q6. Does this waiver increase risks to domain name holders for losses related to those domain names that are caused by their registrars?
A6. No. Based on substantial analysis, ICANN concluded that in today's market the CGL insurance requirement did not appear to provide registrants with the type of protections anticipated in the event of losses caused by a registrar's negligent acts that could typically harm a registrant, such as accidentally deleting or failing to renew a registration, or allowing a domain name to be hijacked. As a result, registrants are unlikely to be harmed by ICANN's waiver of the requirement.
ICANN analyzed the CGL insurance requirement in consultation with an outside insurance industry expert with experience in the technology sector. CGL insurance policies generally protect businesses against liability claims for bodily injury and property damage that occur on their premises, as well as for advertising and personal injury liability in some cases. However, most CGL insurance policies would exclude coverage for errors and omissions by the registrar. In other words, domain name holders generally would not be able to receive compensation from an insurance company (under a CGL insurance policy) for negligent acts by the registrar, such as accidentally deleting or failing to renew a registration, or allowing a domain name to be hijacked. Also relevant to this analysis, ICANN notes that some legacy registries that once had a similar insurance requirement in their Registry-Registrar Agreements have since abandoned it.
Depending on the terms of the registration agreement, a registrant who has been harmed might elect to pursue litigation—or possibly arbitration—against a registrar who has allegedly breached the terms of the registration agreement or otherwise acted negligently. A registrant could also file a complaint with ICANN's Contractual Compliance department if the registrant believes that the registrar is not complying with its obligations under the Registrar Accreditation Agreement.
View the full list of ICANN Contractual Compliance resources.
Q7. What did the Board refer to the GNSO?
A7. The Board requested that the GNSO consider whether policy work on replacement insurance requirements should be undertaken in light of the Accreditation Policy.
The Accreditation Policy authorizes ICANN to reduce the CGL insurance requirement, and the effect of this waiver is to reduce the CGL insurance requirement to $0. Because the Accreditation Policy specifically mentions CGL insurance, any change to require a different type of insurance policy might be most appropriately introduced via GNSO Policy Development. ICANN referred this matter to the GNSO because some community commenters recommended that ICANN require a different type of registrar insurance that might better protect registrants that have been harmed due to registrar negligence.