Does Your Insurance Policy Cover You for Loss or Damage to Data?

Is computer data a form of "tangible" or "intangible" property?   The starting point for this question is always the specific wording of the insurance policy itself.   When no clear answer is found in the policy, courts have reached conflicting conclusions. The question was most recently canvassed by a US court in America Online, Incorporated v St. Paul Mercury Insurance, in which it was found that computer data was intangible property (see E-TIPSâ„¢ Vol 2, No 11, November 6, 2003).   However, in the absence of a definitive answer, this area of insurance law should raise a red flag for businesses.   Depending on the nature and specific wording of the policy, loss or damage to computer data may not qualify as a form of "property damage" under a standard commercial insurance policy and the policy therefore may not cover a claim for indemnity for loss of data.   As a result, the policyholder may be left to absorb a potentially heavy economic loss. To read the full article, see: http://dww.local/articles/computer_data_under_insurance_law.htm. Summary by: Colin Adams