Tech Talk - 1st Party Exposures, Part 2 (4/17/08 Knowledge Knugget)

Is direct physical loss the biggest threat to your web- or technology-dependent clients? You have probably written a property policy for your client, and may have added Electronic Data Processing (EDP) coverage. Will this take care of those things most likely to put your insured out of business?

One of the most important things an EDP form does is confirm that data is insurable property. EDP policies add coverages such as mechanical breakdown, brownout, and data reconstruction to your client's property coverages.

Neither a property policy nor an EDP policy or endorsement are likely to cover:

• Corruption of data due to a hacker
• Introduction of a virus that disables your client's system
• Overloading of your client's bandwidth or email such that it can no longer function
• Employee tampering or human error
• Cyber-attack on your client's business partners that affects your client's operations
  

Tune in next week to see how first party technology/cyberliability policies are addressing these exposures.

(Again, we are focused here only on first party exposures, so the damages that can be done to third parties and the resultant liability are topics for another day.)