A new insurance company to cater to the boom in businesses online could soon spring up in Bermuda, according to one of the Island's leading lawyers.

And Warren Cabral of AS&K added that Bermuda could take centre stage in the world of e-business by offering insurance for companies that use the Internet to do business.

Mr. Cabral told nearly 200 delegates at the International Captives Congress at the Fairmont Southampton Princess that the insurance needs of e-businesses were not being met by conventional insurers.

And he said a new insurance giant could set up in the same way that ACE did ten years ago to deal with the current gap in the market.

Mr. Cabral said: "There is opportunity for a company to set up in an ACE-like format but in relation to Internet risks.'' He added there was a real need for Internet companies that could not be insured by traditional methods, and that a new wave of e-insurers would come along to deal with the new gaps in coverage.

"I believe we will see a new industry of e-cat businesses, to cover the working needs of Internet businesses,,'' he added.

"Bermuda has the financial capacity and the skill to underwrite risks I have described to you today.'' According to Mr. Cabral these gaps are a huge worry to e-businesses who cannot get adequate cover for this new kind of business.

"E-businesses and insurers face new risks simply by doing business on-line.

The question is how to protect oneself from on-line risks, and the absence of adequate cover, is fast emerging as a major business issue in the development of e-commerce,'' he said.

Areas not covered by traditional insurance companies include business income coverage, interruption of service liability, public relations coverage, e-publishing liability, protection of intellectual property, virus cover and some kind of cover to allow for a halt in business due to any pre-existing problems with software.

And Mr. Cabral said that reinsurance was almost impossible to obtain and that many reinsurance companies had not worked out how to cover the business.

"I see an exact parallel to the development of ACE. At the moment you can't get the scope of coverage and people will say, well, we'll cover it ourselves and provide a way of getting it.'' He added: "Bermuda's own ACE, XL and AIG are working on Internet covers. Only Lloyds is working on specific reinsurance products, but these are currently very small scale.

"Bermuda is possibly the only place where massive treaty covers can be designed for the cyber age. Currently, there is simply no cat cover available.'' He added that currently many insurance companies were not well suited to working with e-businesses, who wanted valuations of their businesses done on-line with minimum disruption to their working practices.

And he said a whole new way of working in the insurance world may have to be adapted to these new ways of doing business on line with companies who had no bricks and mortar presence.

But he added that valuation was very difficult to work out. Suits for advertising or public lability were relatively frequent and with high severity.

The loss of service liability was also a high risk, but there was a place for policies with finite risk clauses.

In conclusion he said: "There are billions of dollars out there looking for a home -- Bermuda's creative reinsurance may be an answer.''