A. Keith Stibbards of Ace European Ltd writes:
There are a number of reasons why a system may crash or suffer extended service interruption. Some of these can be covered adequately by property insurance or business interruption cover, while others are more specific to technology, and insurance for this is available through a few niche insurers.
Interruption to service where there’s tangible damage to the hardware, such as through fire, is covered by an ‘All risks’ property insurance policy. In some circumstances a machinery breakdown can be covered by a maintenance contract with the equipment supplier.
However, there’s also specialist insurance available through a limited market, which will cover malicious or accidental damage to software. This includes damage by virus attack, spamming, corrupt files or deletion of data.
Accidental damage will normally only be covered if it results in modification of data. Whether caused accidentally or maliciously, this type of insurance covers the expense of recovering the data.
Businesses whose activities are highly reliant on systems will usually purchase this cover. When considering this type of insurance it’s important to define how reliant your business is on its systems. For example, are there back-up methods which can be employed, and how vulnerable is your company to malicious attack? How secure is your firewall and your systems administration, and how effective and current is your crisis management programme?
If you are not sure, then there are firms that can assess your system’s security and recommend improvements.