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No question that Leland is right. The USA is the most computerized nation. Every thing in life runs on or is controlled by a computer. A friend of mine demonstrated this when he mislabeled a computer controlled switch, when the power company operator acted to switch power from from one grid to an other he inadvertently shut down the power to a continuous process at an oil refinery. There were people running out of the building to distance themselves from the process and people running into the building to distance themselves from the switching station.

No doubt that any computer system that is attached to the internet can be accessed, that access can be from anywhere in the world.

Marine Corps considering new class of cyber warriors

October 12, 2010 - 10:40am

Leaders for the Marine Corps are considering a potential new cadre of specialized cyber warriors who may never see deployment.

The Military Times reports the group would be responsible for cyber warfare and would work the computerized front lines from desks here in the U.S.

The Marine chief for cyber warfare, Lieutenant General George Flynn, isn't offering many specifics. But he does say the cyber warriors could face longer enlistments - two years of which would be spent just in training.

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Not very many people know the history of how insurance companies assisted the US military in WWII. U.S. and British Insurance companies opened their underwriting files to the military to help identify German industrial targets. A big part of warfare is crippling the enemies manufacturing and communications, much of which is non-government owned. The majority of the B52 bombing raids over Europe were targeting industry, for example the huge raid on Schweinfurt, which was designed to destroy Germany's ball bearing manufacturing ability.

Any future major war will likely have a cyber warfare component that targets private businesses.

If war is not officially declared (like Vietnam or 9/11) there could be a lot of claims that would be difficult to exclude as "Act of War". (most policies exclude "Act of War).

On a more practical note I would like to discuss data losses and computer claims that result from storms or fires, because that is something we are more likely to encounter. When I get around to it I will post some language from the CP forms and other forms that discusses this line of coverage.

To be a commercial claims cat adjuster we need to know how to adjust:

books and records losses (which may involve computers, although electronic data may be excluded)
accounts receivable losses (which often involves computer records)
business income losses (which in some cases run longer due to computer outages)

All three of these coverages are part of most commercial polices although the limits on the first two may be only $5000.00 on a typical policy.

Here is a link to the New Mexico Fair Plan CP 99 form. This very common commercial form includes some coverage for computer viruses.

http://www.nmpropertyinsurance.com/...Policy.pdf

(you can also find a DP 01 form on this same website, I believe it is probably the same form as used by Texas Wind Pool, I'm not 100% sure)

One year after I started this thread...

Russian hackers targeted U.S. water plant in apparent malicious cyber attack....

http://www.washingtonpost.com/blogs..._blog.html

Absent a declaration of war or a policy exclusion, damage to the water treatment plant could be covered under a commercial policy.

And any business that is dependent on the water (such as a computer chip plant or a soft drink plant) could have a covered loss if they have contingent location business income coverage.

This type of attack is possibly a "beta test" to see how successful it can be, to prepare for a future cyber war against the USA or some other country, also it may give "street cred" to the perpetrators, who can then command more money for their efforts. The perpetrators aren't necessarily connected to any government- they could be kids or perhaps mercenaries in the employ of a government, or maybe just pirates waging war of their on account. There are stories that US stocks were sold short and put options were placed just prior to 9/11. Somebody made money on the attack. A similar thing could occur with cybercrime.

I believe these kinds of attacks will become more common.

Many such losses will be covered by insurance. Insurance will also evolve to exclude them from cheaper polices and add coverage to special endorsements.