With business becoming either web-enabled or increasingly reliant on computer networks, existing standard insurance covers are proving to be inadequate to cover losses caused by business interruption.
Most losses arise out of voltage fluctuations, virus damages, hackers and denial of service.
The electronic equipment cover takes care of these losses, but the main risk that corporates are exposed to is the loss incurred by the non-functioning of the equipment. This requires additional cover, called the business interruption policy. However, even this add-on cover has its limitations as it does not provide for business interruption losses, caused by the malfunctioning of hardware and networks that are external to the company. In today's business this cover would prove to be insufficient as the insured could be affected by malfunctioning of remote servers and networks which are not owned by the insured. For instance, companies' web-sites are hosted on servers which may be located overseas.