COUNTERPANE INTERNET SECURITY ANNOUNCES INDUSTRY'S FIRST BROAD INSURANCE COVERAGE BACKED BY LLOYD'S OF LONDON FOR E-COMMERCE AND INTERNET SECURITY

Lloyd's of London, Frank Crystal & Co., and SafeOnline Ltd. to Provide Enhanced Coverage Exclusively for Counterpane's Clients

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SAN JOSE, Calif., JULY 10, 2000 - Counterpane Internet Security today announced that its clients and their customers will be able to purchase insurance policies to protect against loss of revenues and information assets caused by Internet and e-commerce security breaches. The first of its kind, this new insurance program from Lloyd's of London was arranged by leading insurance brokers Frank Crystal & Co. and SafeOnline and offers up to $100 million in coverage.

"Until now, the insurance industry has not had sufficient assurance of risk control from security companies," commented Bronek Masojada, CEO of Lloyd's insurer Hiscox. "Now, Counterpane has proven to us-through their unique Managed Security Monitoring service-that they have substantially reduced their clients' exposure to risk. This has allowed us to broaden the coverage and increase the amount and availability of our insurance to Counterpane and their customers."

Counterpane's customers will gain exclusive access to two previously unavailable, innovative insurance programs, the first for Counterpane and the second for its client's clients:

Internet Asset and Income Protection Coverage: Provides insurance for loss of, or damage to, information assets (e.g., data, customer lists, credit card numbers, budgets, proposals, work papers, or any other digital information) resulting from a breach of security or technology failure. The insurance also covers business interruption due to loss of use resulting from a breach of security.

Internet Asset and Income Protection Warranty Plan: This turn-key, insurance-backed warranty plan enables Counterpane's clients to extend the Internet Asset and Income Protection Coverage to their customers quickly and at costs significantly below market rates.

"We're delighted that Lloyd's of London, Frank Crystal & Co., and SafeOnline have recognized Counterpane's services as the digital security benchmark for underwriting these types of insurance policies," said Tom Rowley, Counterpane's President and CEO. "This insurance protection allows our clients, and their customers, to differentiate themselves in their business by offering the highest level of security assurance to their customers. Participating companies will have taken every reasonable step to close the window of exposure for their businesses."

Counterpane responded to the security industry's critical need for insurance, collaborating with Frank Crystal & Co. and SafeOnline to design insurance products that would complement Counterpane's unique Internet security service. The companies then worked closely with underwriters at Lloyd's of London to gain backing for these innovative insurance programs.

"Self-insuring is common for well understood business risks," said Jim Hurley, the managing director of security for Aberdeen Group. "However, Internet-focused systems are capable of introducing unpredictable business risks that are currently poorly understood -- if at all. Rather than risk damage to the brand-equity of the enterprise from unpredictable events, financial officers, IS executives, and business unit managers should be looking to avoid damage while buying peace-of-mind."

"With over one trillion dollars in IT expenditures forecasted by Gartner Group over the next four years, it has become critical to offer additional assurances when conducting business electronically," noted John Bruce, Counterpane's Vice President of Business Development. "It is no longer an option...it is a necessity."

About Counterpane Counterpane Internet Security, Inc. was established in 1999 by entrepreneurial expert Tom Rowley and security technologist and author Bruce Schneier to address the critical need for increased levels of security services. Centered around a network of sophisticated Secure Operations Centers, staffed by expert security analysts, the Company provides 24x7 monitoring, as well as penetration detection, and response. Counterpane's Managed Security Monitoring services enable e-business to be conducted safely. The company is funded by Accel Partners, Bessemer Ventures, Goldman Sachs, and Morgan Stanley Dean Witter Equity Fund. Headquarters are located at 1090 La Avenida in Mountain View, CA, USA. Phone: 650-404-2400, Fax: 650-903-0461, Website: www.counterpane.com.

About Lloyd's of London Lloyd's is the world's leading insurance market with a capacity to accept insurance premiums of 10 billion pounds. In 2000, 122 syndicates are underwriting insurance at Lloyd's, covering all classes of business from more than 100 countries worldwide. Approximately five per cent of world reinsurance is placed at Lloyd's which also accounts for half of the London market's international insurance premiums. The market has an A claims-paying rating from AM Best and an A+ rating from Standard & Poor's.

About Frank Crystal & Co., Inc. Frank Crystal & Co., Inc., one of the largest privately-held insurance brokers, provides innovative insurance solutions and risk management services to meet the unique needs and objectives of its clients. With a core competency in creating new insurance and financial hybrid products for Internet and emerging technology companies, Frank Crystal & Co.'s emerging technologies practice has been reducing risk since the early days of the Internet. The company is headquartered at 40 Broad Street, New York, NY, USA. Phone: 212.504.5823, Fax: 212.504.5989, Website: www.fcrystal.com.

About SafeOnline Ltd. SafeOnline's mission is to create trust on the Internet through a new category of insurance - 'E-insurance'. SafeOnline has brought together skills in insurance, Internet, information technology, customer service, relationship management and marketing to become the dominant e-insurance brand. The company is headquartered at The Lloyd's Building, 12 Leadenhall Street, London, England. Phone: 0+1.44.20.816.6343, Fax: +1.44.20.816.5993, Website: www.safeonline.com

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