Mr O'Dwyer, who funded his university education by setting up a website with links to films and TV programmes, is facing possible jail after a judge last week ruled that he can be extradited to the United States to stand trial for copyright infringement. Even if he is successful in his fight to avoid prosecution, he now faces substantial, unrecoverable legal costs.

"The case is interesting for UK-based web developers, IT consultants, and businesses that specialise in the tech industry because it highlights the exposure that these businesses have to actions from around the world, even if the business is very small or does not trade outside of the UK", says Jenny Carter-Vaughan, MD of PI Expert.

According to Cater-Vaughan, the case highlights how owners of websites with open forum discussion groups or income-generating possibilities, regardless of their size, should consider carefully how to protect against cost of defending such an action.

She says, "There are two relevant types of insurance cover that are essential - Professional Indemnity (PII) and Directors and Officers (D&O) cover."

"PII for tech professions will provide cover for defending claims for inadvertent copyright infringement and will also cover the cost of damages that arise from such actions. Professional indemnity cover will not provide insurance to pay for the cost of defending the extradition hearings or appeals; however a good quality D&O policy will provide this cover."

"Although D&O is normally bought by Limited Companies or Clubs, Societies or Associations, it can be adapted to suit individual traders to provide protection against the risks they face."