Business conducted using computers or over the Internet holds risks of injury and property damage just as other, more traditional businesses do. Accordingly, those claims should be covered. Policyholders should resist arguments by insurance companies rejecting coverage for such claims on the grounds that CGL insurance does not specifically address this type of liability. Although CGL coverage was designed to cover liability from new areas of endeavor like the Internet and the use of other technology, policyholders should prepare for possible disputes with their insurance companies when seeking coverage for lost or damaged information or property contained on a database or computer disk. What my be a single, albeit large claim, for a policyholder could result in numerous large claims for the insurance industry.
Insurance companies have a long history of resisting novel claims by whatever means possible.
Policyholders may wish to consider adding endorsements to their CGL insurance policies to make clear that the policies' coverage for property damage includes liability for related to, or arising from, cover liability arising out of computer software, hardware, or services.