Insurance Solutions for the
Telecommunications Industry
Are you keeping pace?
As technologies converge, new challenges are emerging
that may put your company and profits at risk. Just as the
electronics revolution defined the 20th century, today's
revolution in technology and telecommunications will shape
business in the 21st century - and radically alter the
risk management challenges telecommunications companies
face. To help your company keep pace in a constantly
changing and highly competitive environment, you need an
insurance provider who is as innovative as you are and as
committed to protecting your business.
Chubb has been helping protect the telecommunications
industry since its infancy. Not only do we understand the
roots of your business, we also care about your company's
future. Our approach to insuring companies in the
telecommunications industry is twofold: to respond to the
insurance issues you face today and to help you prepare
for the unknowns of tomorrow.
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A policy built upon experience - yours and ours
Our property and liability insurance program for the
telecommunications industry draws upon our legacy as the
insurer of choice for both the electronics and
broadcasting industries and upon in-depth research of the
requirements and concerns of our telecommunications
customers. By learning what is most important to you, we
can anticipate your specific insurance needs - and respond
with specialized products and services that demonstrate
our true understanding of your business.
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What keeps you awake at night?
The fact is, the issues that make your company
vulnerable today may be entirely different tomorrow. Far
from being the "single entity" business of the
past, today's telecommunications industry is a mosaic of
rapidly changing and emerging enterprises, each with its
own area of specialization, each with its own challenges
from an insurance standpoint. To Chubb, the
telecommunications universe includes operating companies
involved in a wide variety of activities such as Internet
services, software development and integration and data
processing, as well as equipment manufacturing and
infrastructure development.
In designing the optimum combination of insurance
products for existing and potential customers, we took
into consideration a broad spectrum of issues that
telecommunications companies face:
- Competition spawned by the Telecommunications Act of
1996 and the new financial liabilities arising out of
new services being offered;
- The financial impact of losing customers after a
business has endured significant damage to property;
- Obstacles and opportunities created by the Internet
and other network operations;
- New risks resulting from global expansion.
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Solutions for telecommunications companies
Our understanding of these issues and our experience
insuring technology-intensive industries are reflected in
our unique approach to insuring the telecommunications
industry. What follows is a description of various
business situations that telecommunications companies
face, the financial ramifications of each and the
solutions that Chubb provides.
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Situation
Advances in telecommunications technology and the
demand for services have led to new laws in the U.S. and
Europe that limit telecommunications regulation and
encourage competition.
Telecommunications companies are inventing new
technologies and services that take them into uncharted
legal waters. Companies once protected under tariff for
providing phone or data services are now also Internet
service providers, software developers, consultants on
systems and network integration, providers of networking
services and suppliers of outsourced data processing for
others. These services are not protected under tariff and
thus expose providers to liability not only for the cost
of the service, but for consequential damages as well.
What's more, tariff protection is disappearing rapidly.
New agreements between telecommunications service
providers and their customers will attempt to limit
liability for failure to provide services. The questions
is, will these agreements hold up in court? And in a
competitive environment, will you be able to recover the
costs of claims against you by increasing your rates?
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Chubb's solution
Errors & omissions insurance that protects you from
claim damages arising out of your failure to perform or
provide a wide variety of telecommunications services.
Consider these examples:
- A telecommunications company is sued by a reseller
who suffers a loss due to a failure at the telecom
company's switch site. The switch failure was caused
by failure to maintain the switch and its software
properly.
- A telecommunications company that performs data
processing and maintenance of call records for others
is sued. A customer alleges that because your company
was unable to process monthly billings, the customer's
company lost subscribers and revenues.
- A telecommunications company is sued by a customer
for consequential damages arising out of the company's
inability to meet several agreed-upon requirements
specified in the design of the customer's high-speed
switched data network.
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Situation
The Internet is a vital source of business to
telecommunications companies. Many Internet service
providers, web site designers, web hosts or Internet
content providers and users of the Internet are
justifiably concerned about their responsibility for
security of the voice, data and video traffic on their
networks. They are also concerned about lawsuits alleging
theft, distortion, manipulation or loss of customer data
by hackers and about copyright and trademark infringement
suits.
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Chubb's solution
Errors & omissions insurance that provides defense
and indemnity for suits alleging damages because of the
theft, distortion, manipulation or loss of customer data
by a hacker.
- A telecommunications company is sued for
consequential damages alleging breach of security when
a hacker accessed the company's telephone system and
sent a malicious computer code that diverted
communications from its intended recipient, causing
the recipient to lose business.
- A company is sued for the cost of research and
reproduction costs when a hacker accessed a private
network installed by the telecom company and stole
exam questions designed to test candidates for a
medical degree.
- A company is sued for consequential damages alleging
breach of security when a hacker broke through a
firewall of a network provided by the telecom company
and stole and distributed proprietary information.
Intellectual property insurance provides defense and
indemnity for suits alleging infringement of copyright,
title, trademark, slogan, trade dress, service mark or
service name (including defense for injunctive relief
actions) by or on behalf of the insured.
- In an attempt to fix a software problem, a telecom
company inadvertently breaches a software agreement by
changing some code.
- A telecommunications company is sued for copyright
infringement when it allows an interconnecting telecom
company to use software without the appropriate
licensing agreement.
- A company posts a web site and is sued for service
mark infringement by a company in France.
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Situation
Few companies can imagine a catastrophic loss that
would put their entire enterprise out of business for a
full year. Nonetheless, typical "business income/loss
of profits" insurance premiums are based on full
annual income or turnover. However, in many cases, it's
more important that a company has insurance for
"extra expenses" (often sold as a separate
coverage) rather than for loss of income or profits,
because extra expense insurance helps get a company back
into business quickly. But how do you determine how much
extra expense insurance you might need?
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Chubb's solution
We offer you a new way to determine how much business
income and extra expense coverage you need...
- You can select business income and extra expense
insurance amounts based on the cost to cover a full
recovery at any key points in your revenue stream.
Together, these two amounts will most likely represent
less than 25% of your company's annual income (vs.
50-100%), so you may well save premium dollars, in
addition to securing insurance limits that make more
sense for your operations.
You can "blanket" business income and extra
expense amounts to establish your limit of liability.
- What's more, you have complete flexibility in how
your business income and extra expense insurance
limits are applied, which reduces the chance of being
underinsured for one or the other.
You can even protect your company from lost income if
you lose customers. Your ability to recover income and/or
extra expenses doesn't stop when your damaged property has
been repaired. When you choose Chubb's "Unlimited
Extended Period of Restoration," you can continue to
receive income or extra expense dollars until both
business income from operations and customer levels are
restored to the same levels they were before the loss, or
until the limit of liability for business income and extra
expense is exhausted.
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Situation
Most telecommunications companies conduct business
internationally. As a result, differing legal theories in
different countries are particularly important, as is the
need for adequate insurance and access to strong local
representation and services.
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Chubb's solution
Your insurance works worldwide.
- Chubb has an in-depth understanding of how business
is conducted globally - and of the vulnerabilities
that accompany doing business in unfamiliar places.
Backed by a worldwide network of local underwriters,
loss control consultants and claim staff in 115
offices, Chubb offers true global insurance
protection.
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A program backed by exceptional service
Our specially trained loss prevention and claim
specialists provide advice and counsel to customers before
and after a loss. Our loss control staff includes
consultants with advanced technology-specific professional
designations. Their goal is to understand your business as
well as they understand insurance. Particularly today,
when it is not unusual for a telecommunications business
to operate in all corners of the globe, it is comforting
to know that Chubb claim and loss control professionals
are represented in all our offices around the world.
Chubb consistently earns the highest possible ratings
for financial stability as well as claims-paying ability
by leading industry rating organizations such as A.M.
Best, Moody's, and Standard & Poor's.
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About Chubb's Technology Insurance Group
Overseeing Chubb's approach to insurance for the
telecommunications industry is the staff of the Technology
Insurance Group, a team of experienced insurance
professionals dedicated solely to the needs of
technology-focused enterprises around the globe. Built on
the premise that dynamic industries require full-time
attention in order to keep pace with rapidly changing
needs, the Technology Insurance Group offers an unrivaled
approach: "one-stop shopping" and an innovative
portfolio of insurance products for technology-intensive
businesses worldwide.
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Other product features
Chubb's program offers the following features:
Subjects of insurance
- Buildings, including newly acquired
buildings and buildings in the course of
construction.
- Telecommunications property, including EDP
equipment and media; media library; telephone
equipment; valuable papers; other business
personal property and business personal
property in which you have an interest; signs,
fixtures, glass, other tenants improvements
and betterments; and telecommunications
property of others.
- Cell site property and cell site property in
the course of construction, including towers,
antennas, fencing, lighting, earth stations,
microwave or satellite transmitting and
receiving dishes, and, if attached to a tower
or antenna, guy wires, including their
anchors, transmission and distribution lines,
or foundations on which towers or antennas are
mounted.
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- Underground and submarine communications
lines, including installation.
- Overhead communications lines, including
installation.
- Mobile telecommunications equipment
- Telecommunications property while in
transit, at an exhibition or at a trade show
- Installation
- Contractor's equipment
- Employee's personal property
- Accounts receivable
- Money and securities
- Fine arts
- Dependent business premises business income
and extra expense
- Off-premises utilities business income and
extra expense
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Perils
- "All-risk" protection including
machinery breakdown perils
- Earthquake and flood options
Valuation
- Replacement cost valuation
- Ordinance, including demolition and
increased cost of construction for buildings,
telecommunications property and cell site
property
- Debris removal
Liability coverages
- Occurrence-based general liability,
including bodily injury, property damage
(including products and completed operations
and liability for 911 calls), personal injury
and advertising injury.
- Railroad protective liability
- Automobile liability and physical damage
Other coverages
- Workers compensation
- Directors and officers liability
- Crime; fiduciary; kidnap/ransom
- Political risk
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Chubb Group of
Insurance Companies
15 Mountain View Road
Warren, NJ 07059
www.chubb.com |
For
promotional purposes, Chubb refers to member
insurers of the Chubb Group of Insurance Companies
underwriting coverage: Chubb Insurance Company of
Europe S. A., Chubb Insurance Company of
Australia, Limited, Chubb Indemnity Insurance
Company, Chubb Insurance Company of Canada, Chubb
Argentina de Seguros, S. A., Chubb do Brasil
Companhia de Seguros, Chubb de Chile Compania de
Seguros Generales S. A., Chubb de Columbia
Compania de Seguros S. A., Chubb de Mexico,
Compania Afianzadora, S. A. de C.V., Federal
Insurance Company, Great Northern Insurance
Company, Northwestern Pacific Indemnity, Pacific
Indemnity Company, Texas Pacific Indemnity
Company, Vigilant Insurance Company. Not all
insurers do business in all jurisdictions. This
literature is descriptive only. The precise
coverage afforded is subject to the terms and
conditions of the policies as issued.
Form 36-01-0015 (Ed. 8/98) |
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Return to Frequently Asked Questions
REMEMBER: Always refer to your policy and
review all papers carefully to be aware of any limitations
or exclusions which may apply. Remember, ALL policies
contain certain limitations and exclusions, a policy is
nothing more than a contract between you and an insurance
company. Consult your policy and ask your Agent,
just to be certain that you are clear on issues which may
effect you.
