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?

A virtual world—This is not a game you can win or lose

Over 14 million “residents”

Has its own currency, the “Linden dollar”
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What is Second Life?

Residents can purchase virtual land

Buy virtual products

Outfit their avatars in virtual clothing

And find things you can’t buy in the real-world
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How Are Schools Using Second Life?

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
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Which Schools Are Using Second Life?

At least 170 accredited educational institutions, including:
– Harvard
– Princeton
– MIT
– NYU
– Stanford
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The Key Risks and Liability Concerns

Cyber-Assaults, cyber-bullying and even cyber-“rape”
– “Griefers”
– “Virtual” Shooting at Ohio University’s virtual campus



Tort Liability?
Violations of Second Life’s Code of Conduct and Terms of
Service
Off-Campus Problems / Policy Issues
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The Key Risks and Liability Concerns

Intellectual Property and Copyright Issues

Property Disputes and Property Damage
– Princeton vs. MIT
– Bragg vs. Linden Research , Inc.
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Educators Legal Liability

70% of claims are Employment Practices Liability

Claim cost
– 68% Legal defense
– 32% Indemnity

Potential expansion
– Internet: E-hate mails; Harassment / bullying; E-stalking
– Economic impact on layoffs,
– Program cutbacks and closures
– Federal regulatory expansion of ADA, etc.
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Cyber Risks: 2005-2008*

Breaches of Privacy: 180
– Medical Centers: 25

Records: 6 Million

Type of Loss:
– SSN, Patient Records, Credit Card
– Stolen laptops/theft

Cost associated with breaches
– Recovery of operations
– Identity theft (credit card / SSN#)
– Patient information
*Serious Events Study, Kroll Fraud Solutions,
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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,
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Web-related Risks

Privacy Issues
– MySpace
– Facebook
– File sharing
– Downloading unauthorized material

EPL-type Claims
– Hate mail
– Cyber bullying
– E-stalking
– Harassment
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Litigation: Reality vs. Virtual?

Colorado University Settlement
– Two women sexually assaulted at off-campus party
– $2.5 million settlement against school

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
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Minimizing the Risks

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)

This Is a Unique Opportunity – Be Proactive

Get Involved
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Questions?
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Contact Information
Jean Demchak, Managing Director
Global Education Practice Leader
Marsh, Inc.
One State Street, 19th Floor
Hartford, CT 06103
860-723-5635
Cell 860-805-0677
[email protected]
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