Ruling Opens Way to Greater Insurance Liability
A federal judge in Arizona last week ordered an insurance company to pay more than $3 million to a computer firm for business lost as a result of a power outage.
In December 1998, an electrical short in a fire alarm panel at Ingram’s main data center in Tucson, Ariz., resulted in the loss of programming information stored on mainframe computers, which prevented the company from accepting orders for about eight hours.
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The decision opens a broad new area of potential liability for insurers and raises questions about the adequacy of insurance coverage for businesses that rely more and more on computers and the Internet to generate sales.
The case involves a dispute between Ingram Micro, a wholesale distributor of computer products in Santa Ana, Calif., and American Guarantee & Liability Insurance Co., a unit of Zurich American Co., Schaumburg, Ill.
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