Business Interruption Coverage Times Three


Unlike the discovery-based income coverage typically offered in cyber forms, the MSO form provides computer interruption coverage on a loss- sustained basis.

AAIS is descended from inland marine rating organizations and remains an industry leader in product development for that line. Among other things, AAIS revived the use of first-party “output” coverage with the 1993 filing of its Commercial Output Program (COP), a widely-recognized successor to the old “manufacturers output policy.”

In general, output policies combine coverage for property and inlandmarine exposures into a single formor a few coverage parts with a single rating procedure, as opposed to numerous rating procedures for coverages added individually by endorsement.

In keeping with the broad coverage that characterizes output policies, the COP’s income coverage part includes built-in coverage extensions (under the income limit) and supplemental coverages (under separate sublimits), including one for lost earnings and extra expenses arising from electronic computer hacking or a computer virus.

To trigger the income coverage, the virus or hacking must:

There is a built-in waiting period deductible of 12 hours for loss of income due to physical loss or damage to computers, networks or websites, but no waiting period for loss of income arising from denial of access or service.

A “Simple” Scenario

Given all these variations, there is much to consider when addressing an income loss — components of which could be covered under different types of policies.

Imagine this event:

A windstorm damages an insured building, disrupting onsite power distribution and causing electrical arcing that damages covered equipment. This event also disables information security systems and online criminals capitalize by stealing data and implanting disabling codes to hide their tracks.

Then, consider this highly simplified coverage scenario: