The computer systems are broken and the company must close down for recovering works. This period can bring huge losses, but there is the new insurance service, which could cover all the lost money.

Today the computer and computer network are the basis of successful and productive work of every company. Sometimes the systems of databases, computer networks or other electronic equipment, which play a crucial role in companies’ work, simply break down. It may be software mistake, bad data or physical causes just like fire, lightening, storm flood or other kinds of damage. The company has to close for a while to restore all the systems. During this time the profit is being lost; the workers, who do not work should be paid their salaries. Thus the company looses a lot.

To prevent this kind of situation Swiss insurance company Swiss Re has introduced new kind of insurance. Business interruption Insurance covers the loss of profit, workers’ salaries, other expenses like for electricity, water etc. The insurance is valid only when the damage is done by computer systems and the company actually has to close down.

The insurance money is usually paid during 12 months unless the client needs more time. The insurance company pays all the money for the profit, which could be earned during the shut down of a company and recovering period. For example a company during one month when everything was being restored lost 10 million dollars, the insurance has to cover the loss until the previous level of client company income plus other expenses like taxes for heating, water etc. The sums of insurance are defined according the company’s profit (or loss) account and other accounting documents as well as the plans of forthcoming budget of the next year.

This service is mostly for companies working with data or computer systems crucial for functioning. Nuclear plant, airport, stock exchange, for instance. Banks also work with data; but even though the system breaks down, financial operations are going and bank is earning money. It is very difficult to distinguish when the company stops having profit and when profit is still going without computer systems. The insurers are careful about it because it could be issued.

As in all kinds of insurance, the cheating is threatening this new insurance business. For example, one company doing not very good or not receiving any profit at all makes a contract with insurance company and after some time all the systems are down, company stopped, recovering works lasts couple of months. Insurance company according to agreement has to pay the salaries for the workers and the most important, the profit, which could be got during the period of interruption. When company is not making any profit at all, but insurance company pays for pseudo profit it is considered to be clear cheating and punishable by law. In order to avoid situations like this, insurance company checks the trustiness of insured firm. This service is important for huge companies, sometimes state ones, so the risk of being deceived.

JSC Seesam Ltd. is the only insurance company in the Baltic States providing with such kind of services. As liability Manager Raimonda Lièkûnienë; said, now Seesam is introducing only business interruption insurance for those who might be interested in: airports, electricity plants, etc. “The big job is to convince bosses of huge companies that new kind of insurance and in particular business interruption will be useful in the future. When something happens, the conflict between insurance and client company arises. Sometimes the heads of the companies are accusing insurers why they did not warn about the possible dangers", she explained. Company still doesn't have clients for this service, but there is a hope that in the future companies will understand how much this kind of insurance is worth. Nobody is guaranteed that systems will not break down.