Many people are predicting that computing will move off your PC and onto the Net; this is also called "cloud computing." The idea being that you have your software and data residing out on the Internet. Google has provided these tools for free with it's Google Documents service. Amazon provides a paid service for storage and retrieval of data with its S3 service.
The problem from an insurance perspective is that companies that rely upon outsourced data storage services present a new twist for insurance: if the company does not handle it's own data integrity, who does, and is this fact considered when a cyber risk is underwritten? Does cloud computing actually make the data realm more safe, say, by putting data storage in the hands of "professionals"? Does it open up the possibilities of suits against the data storage companies for outages, notwithstanding their contract terms?
On Friday, Amazon's S3 service was disrupted for several hours. Clients include the NY Times and Twitter. A WSJ blog gives some details and discussion here.
