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Remember Y2K?

Computer_payment_2 Let’s take a look back at December 31, 1999.  Reports were coming out that when the clock struck midnight, every elevator, VCR, television, computer, microwave and many other items were not going to work.  Companies spent thousands of dollars – even hundreds of thousands of dollars – to prepare for this event. 

Overall, did the world shut down?  I don’t think so.  Don’t get me wrong, some companies needed to do some serious upgrades. 

What else was happening around the world? E-Commerce!  Or utter chaos to the insurance industry. 

It was obvious that companies were relying more and more on the internet to conduct business. That meant it was critical that their internal computer systems and networks were reliable – and secure – in order to keep things running smoothly. 

A few insurance carriers developed liability policies that covered claims for third party liability – things like:

  • injury or damage because of a wrongful act, error, or omission in regard to professional services
  • spread of computer viruses
  • infringement of some form of intellectual property right.

Other carriers developed first-party policies.  These polices covered the insured if they lost income or had extra expenses due to the crash of their own systems, software, or web site.

Today, insurance companies look at activities like:

  • E-Business: e-mail and internet site accessibility.
  • Performance of Professional Services: design and installation of networks, monitoring and repairing such systems, system security issues.
  • Media Activities: broadcasting of content, downloads, hold harmless agreements, corrupt files.

The insurance industry has identified some of these areas of risk and changed the wording of the insurance contract itself.  The definition of “property damage” now gives identity to the word “data” which limits insurance coverage.

If you perform any of the three mentioned activities – e-business, professional services, and media activities – please review your insurance policies and language with your agent. 

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Comments

Great stuff Brian!

This is food for thought that I hadn't spent any time on before.

So... thanks for getting me thinkin'!

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