Do Restoration Contractors Need EDP Insurance?

A standard property insurance policy provides very limited coverage for computers. To properly cover computer equipment, any peripheral devices, and data including the cost to research, replace or repair lost or damaged software requires Electronic Data Protection - EDP Insurance.

EDP Insurance

EDP insurance is designed to cover the unique risks associated with computer exposures and typically include three core areas of coverage;:

• Equipment -- Computers, servers, laptops and other hardware.

• Media -- Hard drives, backup tapes, and other data storage devices.

• Data -- Software applications that store your business data and facts, concepts, or programs as well as additional expenses associated with data recovery.

The equipment and media sections of an EDP policy provide expanded coverage to your restoration company's electronic equipment. In fact, many policies even allow you to schedule large or expensive pieces of electronic equipment providing you with a per item limit listed on the policy.

The risks associated with data exposures are important to consider since data, when damaged or destroyed, is often difficult and expensive to replace or retrieve. Keeping in mind that data insurance coverage is not standardized, difference insurers define their coverage in the insurance marketplace; carriers may define data differently and offer different forms of coverage. A close examination of the terms of your policy is necessary to determine the adequacy of your data coverage.

EDP Insurance Coverage Considerations

As your restoration company considers purchasing an EDP policy, here are some important questions to consider include:

1. Does the policy provide coverage for losses caused by a computer virus?

2. Accidental erasure of data?

3. Does the policy provide coverage for losses caused by hacking?

4. Employee sabotage?

5. Does the policy include coverage for a denial of access?

6. Changes in temperature?

7. Does the policy include coverage for business interruption and extra expense coverage?

8. Short circuiting of equipment?

9. Does the policy include coverage for the cost of hiring a forensic expert if one is needed?

To find out more about EDP insurance and whether it is right for your restoration company, please contact our office to find out more.