Insuring virtual reality

August 17, 2011

In what it claims is the first offering of its kind in the world, a Chinese company, Sunshine Insurance Group Corporation, is offering an insurance policy for virtual property owned in cyberspace.  The company seeks to fill what, I presume, is a market void in the offering of coverage for property held in fee simple absolutely imaginary.

The market for role playing games has proven to be a profitable one, with users buying the games, paying monthly access fees, and in many cases, using real money to purchase property and items in the virtual realm.  It only stands to reason that the people putting that money out want to know that their interests are protected.  According to China Daily (database identifier CHDY), the company seeks to create the virtual property insurance amid an increasing number of disputes between online game operators and their customers, often related to the loss or theft of players’ “virtual property” such as “land” and “currency.”

A Sunshine Insurance spokesman said the insurance will help to reduce operating risks for online gaming companies, as the companies which purchase the insurance will be covered to compensate customers in the event of lost or stolen property.

The spokesman said that the insurance agreement is also a landmark achievement for the insurance industry, as it marks the industry’s first foray into the online gaming sector.

7/7/11 WRLDNWSC 07:49:02

So does a gamer have an insurable interest in his pretend property?

According to Couch on Insurance, they just might!

Generally, a person has an insurable interest in a property whenever he or she would profit by or gain some advantage from the property’s continued existence or suffer some loss or disadvantage by its destruction.  If the insured would sustain a loss by the destruction of the insured property, it is immaterial whether he or she has any title in, lien upon, or possession of, the property itself.  Any right that may be enforced against the property and that is so connected with it that its injury or destruction will cause loss is an insurable interest.  Thus, any interest in property, legal or equitable, conditional, contingent, or absolute is insurable.  Even a mere right to use property is insurable, and the lack of an obligation to pay rent is inconsequential to the property’s insurability.

3 Couch on Ins. § 41:11

So if the loss or destruction of your Abandoned Greatsword puts you at a disadvantage against the trolls and goblins, you might be able to collect!  I wonder if this means I can carry full coverage on my Mario Kart?

Other References

See also this from Robert Paul Norman:

This article discusses some of the insurance issues arising from e-commerce conducted under traditional insurance products and reviews the new policies being promulgated for cyberspace.

Virual Insurance Risks, Brief, FALL 2001, at 14, 15