At a glance
- Normal property policies generally do not provide effective cover for office computer equipment
- Zurich’s standalone computer insurance policy has generous wordings for office equipment and data
- Following IT best practice could also prevent potential disasters
Today, in a world of smartphones, tablets and cloud storage, every business of any size is reliant on information technology in some form or another. Unfortunately, many don’t realise how dependent they are on technology until it is too late.
If a company’s IT equipment or systems fail, they can be exposed to the risks of business interruption, income loss and possibly reputational damage. In the event of data loss or a major incident, such as a fire or flood, a property policy may not provide effective cover for all aspects of a claim.
Zurich’s checklist for back-up best practices
- Does everything need to be backed up? The most important question to ask your clients is: what can’t you afford to lose?
- What is your data environment? Once you know what requires backing up, you need to determine the systems and hosts where it’s located; how often it needs to be backed up and how often it’s likely to be retrieved/restored. Also, how long it must be retained and in what form. As well as how much time you have to complete the back-up and what kind of security the data requires.
- What is the best back-up for your business? Find the best system that aligns with your business needs and automate as much of the back-up efforts as possible.
- Who’s in charge of back-ups? Ensure back-ups are completed properly, including assigning responsibility for getting them accomplished, monitoring problem areas and ensuring staff are properly trained.
- Can data be restored? Rank the importance of your data and establish ways that the most important data is backed up first and restored first. Ensure at the end of the day or week, there is adequate time to back up all the data that’s important to your business, and be aware of the time required to restore that data in case of loss or corruption.
- Is the data safe? Generally, this means storing your back-ups in a logically and physically secured offsite location. Also, maintain back-up logs so you and your auditors can track back-up activities and updated procedures as your business needs and conditions evolve.
- How is old data disposed of? All drives should be physically destroyed so that their contents cannot be read by unauthorised personnel.
The need for computer policies
That is why many brokers recommend standalone computer policies to their customers, which can respond to specific IT disasters. Zurich’s computer insurance policies cover the costs of replacing lost data following loss, damage or even a breakdown provided that the data was periodically backed up.
There are a large number of companies that don’t follow simple IT best practice, such as regularly backing up data, encrypting customer information and using appropriate data storage.
“When thinking about data protection, you have to think of the IT security that goes with it,” said Andy Penny, Engineering Line of Business Manager at Zurich. “Customers have got to make sure that any data they store, especially where on external servers or in ‘the cloud’, is encrypted and can only be accessed by the correct people.
“Another common IT security provision that is often overlooked is where the data is stored. Keeping all forms of data in one place may seem easier but it isn’t always the best solution. For example, customer details and their bank account details should ideally be kept separate.”
Andy added: “We always insist on regular back-ups of data and periodic testing of those back-ups so you know that they’ll work in the event of something going wrong. This is basic good practice. You wouldn’t leave the office without locking the door at night, and if you did, you wouldn’t expect your insurer to pay for any losses arising.
“We don’t turn down many computer claims but we do see instances where clients have failed to back-up records. You can get situations where someone has backed up records and there’s a further problem in the middle of restoring the data. We’ve had that happen, on one occasion a lightning strike during the restore process led to the loss of back-ups.
“That’s what insurers are here for because such events are unforeseen. There’s also not a lot you can do about that from a risk management view apart from having multiple sets of back-ups or servers. The fact is you’re always going to lose data in some circumstances.”
Recompilation and recovery of data
The computer cover on offer from Zurich also has a generous wording on the equipment that it covers, making sure that anything used for the electronic processing, communication and storage of data falls under the policy. It also provides cover to re-instate, re-compile and replace data as well as increased cost of working required to maintain the operations normally performed by the computer equipment.
“Zurich’s computer policy covers the computer equipment itself as well as any peripheral devices,” said Andy. “This includes anything that has computer processing power – so that can be a smartphone, tablet or most forms of mobile device. It also covers projectors, printers, photocopiers and telephone systems, all the peripherals that sit with the data processing systems in a company environment.
“We also have an additional expenditure section, which covers the increased costs to keep the business working and the cost of reinstating any data you lost during an outage.
“For instance, if you normally back your systems up each night and your systems go down at 3pm, then you’ve effectively lost a whole day’s work. Zurich will cover the expenditure necessary to reinstate the computer data for that particular day.”
We always insist on regular back-ups of data and periodic testing of those back-ups. This is basic good practice. You wouldn’t leave the office without locking the door at night, and if you did you wouldn’t expect your insurer to pay for any losses arising
Andy Penny, Engineering Line of Business Manager at Zurich
Zurich’s computer policy is flexible depending on the levels of security a company already has in place. Also, with the increase in mobile devices becoming an integral part of business, cover is also offered for computer equipment away from you premises on a global basis.
“For brokers with large corporate customers, who have loads of computer equipment, you should consider a computer policy rather than relying on property covers,” said Andy. “It won’t cost significantly more, but if you have around £100,000 or more of IT equipment on-site, you should consider the need the specialist cover.”
For more information, visit Zurich BrokerZone.