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

2. 2 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”

3. 3 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

4. 4 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

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

6. 6 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

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

8. 8 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.

9. 9 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,

10. 10 2008: Incident Breakdown by Type* TYPE20072008 Unauthorized disclosure 38%44% Theft28%23% Penetration22%20% Employee Fraud1%6% Loss9%5% Impersonation2% *Serious Events Study, Kroll Fraud Solutions,

11. 11 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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13. 13 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

14. 14 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

15. 15 Questions?

16. 16 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