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A New Kind of Insurance for New Age of Microelectronics

January 5, 2017

Unless you’re a devoted reader of science and technology publications, you probably missed the news:

Members of the brain trust at UC San Diego have manufactured the first semiconductor-free, optically controlled microelectronic device.

microelectronics insurance
CCIG’s Morgan Mahoney

What’s that, you say?

Using composite materials, these engineers fabricated a device on a very small scale that displayed a 1,000% increase in its ability to conduct electricity.

This advance – part of a drive to make things smaller, faster and more efficient – could eventually help manufacturers develop solar panels that are many times more efficient than those now on the market.

Pretty cool stuff, right?

But what happens when sensitive micro-circuitry that is thousands of times smaller than a human hair breaks down? We’re not talking about big factory refrigerators or heating systems. It’s easy to see the damage when, for whatever reason, those items grind to a halt.

We’re talking about nanometer transistors so small that 100 million of them would fit on the head of a pin. We’re also talking about firmware that can contain millions of lines of complex code.

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Traditional property insurance policies cover equipment breakdowns that we can see. But damage in micro-circuitry can be difficult, if not impossible, to detect.

This technology is already present in a slew of mission-critical devices and machines used in the healthcare, manufacturing, engineering, retail and other fields.

It’s also so sensitive that the static charge from handling bubble wrap can cause it damage. Imagine what a real power surge can do.

Imagine, too, you’re a nursing home that uses portable ventilation equipment that develops an electrical short in its control board. Or perhaps you’re an accounting firm that has lost data stored in the cloud. Or a restaurant that was forced to close for several days after your walk-in refrigerator was damaged in a power surge.

Getting You Back Online

Property insurance doesn’t cover those sorts of events. Frankly, it wasn’t designed for today’s high-tech world. That’s why insurers today have begun to offer coverage of a different sort, policies that will get businesses that rely on microelectronics back on their feet in case of costly equipment failure – even when no evidence of physical damage can be detected.

Microelectronics coverage kicks in when that equipment suddenly stops functioning and must be repaired or replaced.

It also pays for data research, lost business income and extra expenses incurred when your company’s cloud service provider suffers an equipment-related outage. This coverage is expected to be more important as more businesses migrate to the cloud – and realize that an interruption in the virtual world can be as disruptive as, say, a fire in one of their warehouses.

Microelectronics policies also help you pay for data restoration after a service interruption. This coverage includes data stored either on your company’s servers or in the cloud.

Because so much of the equipment used by businesses today is mobile, these polices include off-premises coverage, too, so your protection extends wherever your workforce goes.

Technology has changed much about our lives, in ways often not visible but definitely real. And now there’s better insurance for that.

Morgan Mahoney is a CCIG Insurance Advisor. Reach him at or 720-330-7926.

Related: Insurance that Softens the Blow of Faraway Disaster

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