CR 04 13–DESTRUCTION OF
ELECTRONIC DATA OR COMPUTER PROGRAMS BY EMPLOYEES
(February 2026)
With the 06 22 edition,
this endorsement adds “By Employees” to the end of the title. It covers
the reasonable cost to replace or restore damaged or destroyed
electronic data or programs in a computer system if a computer virus or unauthorized
system access causes the loss.
This
analysis is of the 06 22 edition. Material changes are bolded, but format
changes that do not affect coverage are not highlighted.
This endorsement can be
added to the Insurance Services Office (ISO) Commercial Crime or Government
Crime Coverage Forms or Policies.
This is an endorsement
to the ISO Commercial Crime or Government Crime Coverage Forms and Policies and
is subject to their conditions, definitions, and exclusions. The only changes
are those within this endorsement.
Section A. Insuring
Agreements of the policy or coverage form now includes the
following:
Destruction of
Electronic Data or Computer Programs By Employees
Coverage applies for the named insured's
reasonable costs to replace or restore damaged or destroyed computer
programs or electronic data stored within any computer system. This coverage
applies only if the data or programs are stored on systems owned, leased, or
operated by the insured. The damage must be directly caused by vandalism
committed by an employee.
|
Example: A disgruntled employee intentionally
infects the named insured’s computer system with a virus, resulting in
significant data damage. Coverage includes the expenses for restoring the
system to its pre-loss state, up to the policy limit. Expenses for necessary
security upgrades to prevent future attacks are not covered. |
The limit of insurance
listed in the declaration is the maximum amount that will be paid for a loss
occurrence.
The loss
amount must exceed the deductible indicated on the Declarations before
any payment will be made.
·
The
following exclusion is replaced by this endorsement as follows: Acts Committed by Your Employees, ERISA Plan
Officials, Managers, Directors, Trustees, or Representatives
Loss resulting from
theft, fraud, or dishonesty, regardless if acting alone or with others, or
while performing services for the named insured.
However, this exclusion
does not apply when covered under Insuring Agreements:
o A.1.a – Fidelity
Employee Theft
o A.1.b. – ERISA Plan
Official Dishonesty
o A.1.c. – Employee Theft
of Clients’ Property
o
This
insuring agreement.
The following exclusions
are added by this endorsement as follows:
·
Errors Or Omissions in Design of Computer Programs
Loss
that
results from the design of a computer
program.
·
Errors or Omissions in Programming
Loss that results from
any processing or programming of electronic data.
The following condition
is replaced by this endorsement as follows:
· Duties In The Event Of Loss
The Named Insured must
notify local law enforcement if it is believed a loss involves a violation of the
law.
However, this condition
does not apply when covered under Insuring Agreements:
o A.1.a – Fidelity
Employee Theft
o A.1.b. – ERISA Plan
Official Dishonesty
o A.1.c. – Employee Theft
of Clients’ Property
o A.2. –Forgery or
Alteration
o
This
insuring agreement.
The following conditions are added by this
endorsement:
·
Electronic Data
If there is loss of or
damage to electronic data, the insurance company will cover reasonable costs to
restore or replace it. This includes data entry and consultative services. If
the data cannot be recovered or replaced, the cost to replace the storage media
where the data was stored is also covered.
However, there is no
coverage for the cost of reproducing the research that created the insured’s
electronic data.
·
Computer Programs
If there is loss or
damage to computer programs, the insurance company will cover the reasonable
cost of replacement or restoration. This includes reprogramming and consultative
services. However, there is no coverage for the cost of reproducing the
research that created the insured’s computer programs.
The following is added to the definition of Occurrence:
Occurrence is a single act or event, the total of multiple acts, or a
sequence of acts or events committed by an employee or another individual
during the policy period. These acts or events do not need to be connected,
although they can be. They may be carried out alone or in collusion with
others.
A Government Crime section is now included in the 06 22 edition of this endorsement. It provides the same coverage as the Crime Forms and Policies above, but the main differences lie in the entities to which the exclusions apply and the relevant insurance agreements.
The following exclusion
is replaced by this endorsement:
·
Acts Committed by Your Employees, Officials or
Representatives:
Loss resulting from
theft, fraud, or dishonesty, regardless if acting alone or with others, or
while performing services for the named insured.
However, this exclusion
does not apply when covered under Insuring Agreements:
o A.1.a – Employee Theft
– Per Loss Coverage
o A.1.b. – Employee Theft
– Per Employee Coverage
o
This
insuring agreement.
The following
exclusions are added by this endorsement:
·
Errors Or Omissions in Design of Computer Programs
Loss that results from
the design of a computer program.
·
Errors or Omissions in Programming
Loss that results from
any processing or programming of electronic data.
The following condition
is replaced by this endorsement:
·
Duties In The Event Of Loss
The Named Insured must
notify local law enforcement if it is believed a loss involves a violation of
the law.
However, this condition
does not apply when covered under Insurance Agreements:
o A.1.a – Employee Theft
– Per Loss Coverage
o A.1.b. – Employee Theft
– Per Employee Coverage
o A.2. – Forgery or
Alteration
o
This
insuring agreement.
The following conditions are added by this
endorsement:
·
Electronic Data
If there is loss of or
damage to electronic data, the insurance company will cover reasonable costs to
restore or replace it. This includes data entry and consultative services. If
the data cannot be recovered or replaced, the cost to replace the storage media
where the data was stored is also covered. However, there is no coverage for
the cost of reproducing the research that created the insured’s electronic
data.
·
Computer Programs
If there is loss or
damage to computer programs, the insurance company will cover the reasonable
cost of replacement or restoration. This includes reprogramming and
consultative services. However, there is no coverage for the cost of
reproducing the research that created the insured’s computer programs.
The following is added to the definition of Occurrence:
Occurrence is a
single act or event, the total of multiple acts, or a sequence of acts or
events committed by an employee or another individual during the policy period.
These acts or events do not need to be connected, although they can be. They
may be carried out alone or in collusion with others.