The time has come for computer risk insurance. It will be one of the most important innovations in information management, exceeding most recent technological advances. Insurance premiums may soon become a large component of every organization's information technology budget.
Insurance is critically important for our civilization to function.
Without insurance, airplanes may not fly, automobiles must stay in the garage, X-ray machines may shut down, chemical factories may close and buildings may not get construction permits. Complex machinery and facilities are insured because their risk of failure is widely recognized and requires the protection insurance offers. Insurance delivers social and economic value by asking the insured parties to weigh the costs of potentially excessive premiums against the exposure to losses. In this way, insurance puts in place a market mechanism for judging a technology's reliability. In the absence of insurance, government regulators and inspectors step in, often with solutions that are worse than the situations they try to remedy.