The Mark IV Industrial Special Risks Policy wording has been placed in the spotlight amid concerns about insurance cover following the Optus outage that affected about 10 million people and 100s of businesses.
According to The Conversation, one of the early reasons provided as the cause of the failure was a fault in the “core network.” Most internet carriers, including Optus, use a three-layer network architecture where the core layer is one of the main layers and the most abstract.
As a result of the outage, Australian businesses started asking about insurance cover. Early indications, however, suggest current policies could provide limited coverage at best.
Under an ISR policy, it was explained in a Clayton Utz blog, business interruption cover includes physical damage up to tangible insured property. Meanwhile, some ISR policies have extensions covering business interruption due to utilities outages despite not having any physical damage to the insured’s property. The latter would be relevant when considering potential insurance cover for losses consequent upon the Optus outage.
The coverage, however, may differ based on whether a waiting period applies, a sub-limit applies, or if the incident includes telecommunications outages.
Optus customers had to go without mobile and internet for more than nine hours due to the outage. Customers and businesses were unable to connect to the internet or make or receive calls.
Federal Communications Minister Michelle Rowland said Optus needed to be transparent with its customers who were experiencing “a high level of anxiety and frustration.” She encouraged consumers to keep their receipts in case they needed to seek compensation.
Meanwhile, the Telecommunications Industry Ombudsman advised customers to lodge a complaint if they were unhappy with the response from Optus when they called. Greens Senator Sarah Hanson-Young called for a Senate inquiry into the outage, noting the importance of having reliable phone and internet services to Australians.
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