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Selecting the right name for your business website can get expensive. In the insurance industry, for instance, names such as insuranceratequote.com or youngdriversinsurance.net routinely sell for four figures. If you pay someone who has no legal right to the domain name, you could lose several thousand dollars on the deal. That risk has led to the rise of domain insurance.

Domain Name
To computers, a website name is a string of numbers and letters a person would find impossible to remember. Domain names such as google.com make it simpler to remember and find the websites you want. Registrars are the companies responsible for registering new domain names, keeping track of who owns the names in the company's registry and making sure a new domain name doesn't duplicate one that's already in use.

Stolen Names
The sale of domain names has been a growth industry even in the 21st century's economic slump, Karen Klein says in "Bloomberg Business Week." A business that owns a high-value name such as insurance.com or military.net can make big profits on the sale, and profit attracts thieves. By hacking your email, a thief can contact the registrar and take control of your domain name. If you don't discover the theft in time, your right to contest it could expire.

Domain Insurance
Domain insurance offers services to both domain name owners and potential buyers. Just as home buyers use title insurance to check the seller's title is legitimate, a domain insurer will research a domain name you want to purchase. This would cover not only whether the seller is the rightful owner, but past legal and trademark disputes that might cause problems. Some insurers also offer registrar surfaces to domain owners with heightened security. If the name is stolen anyway, the insurer covers the owner's losses.

Drawbacks
Writing on the Domain Name News website, Frank Michlick questions whether domain insurance can be 100 percent reliable: To be successful, it requires extensive research, and some registrars don't track ownership changes closely enough for the insurance agent to research them. Domain News Wire points out that anyone can go to the Whois database and research a domain name's ownership history for themselves. The first step to protecting yourself is using the same standards as with any other transaction: If it seems too good a deal to be true, it probably is.

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