Insurance exclusions do not count in case of loss of source code

The Appeal Court overturned a High Court decision in favour of the insurer last year, and against Tektrol Limited, which provides energy-saving control devices for industrial motors, reports Out-Law.com. Lord Justice Buxton, giving the majority opinion of the court, followed a rule established in a 19th Century case that, in cases of real doubt, exclusions in insurance policies had to be interpreted ‘most strongly against the insurers’. The judge wrote: ‘Although, as agreed between the parties, the author of the virus was a \'malicious person\', the clause does not extend to interferences by such people that are not directed at the computer systems, etc, used by the insured at the premises. If the insurer wished to exclude all damage caused – however indirectly – by a computer hacker he needed to place that exclusion in a separate clause, and not refer to malicious persons in the same terms as rioters or locked-out workers.’ Full report in Out-Law.com The ruling