Cyber Risk

Camargue’s Cyber Risks policy covers organisations against the risks arising out of operating a computer network. Depending on what options have been selected it can also -

  • Cover liability arising from on-line publishing (such as a web site) as well as from traditional media such as brochures
  • Provide professional indemnity cover appropriate to technology companies
  • Provide a form of specialised business interruption cover which covers the Insured’s loss of income arising out of computer down-time
  • Cover the cost of recovering the Insured’s lost data.
Question: Stolen source code example
Answer:
  • The insured is a retailer who used a software development company to create their internet based retail system.
  • The insured’s concern was that the developers might wrongfully use a third party’s source code when developing this program. In other words, instead of building all the components of the program, they would take a short-cut and use part of someone else’s pre-existing program.
  • If that third party were to find out that a part of their system had been plagiarised, they might get a court of law to stop the insured from using the program.
  • Although the retailer required the developers to indemnify them for this kind of loss, the developer’s guarantee was inadequate because the developers were:
    • not willing to cover the consequential losses that the retailer suffered.
    • not financially strong enough to indemnify the retailer for a large loss.
  • This could be covered under Insuring Agreement 4 (Data Recovery and Loss of Business Income)
  • This policy can provide a viable compromise when software developers are unwilling or unable to guarantee the reliability of their product.
Question: Non-monetary compliance example.
Answer:
  • A blind customer insists that he receives his monthly account statements in brail. The Insured refuses to comply and the consumer escalates the matter in terms of the Consumer Protection Act.
  • The CPA tribunal rules against the Insured and orders them to send out the statements in brail. Is this additional cost of compliance covered?
  • No, the definition of Damages excludes the costs of compliance with non-monetary awards against the Insured.