At a glance
- Businesses are increasingly reliant on their computers and mobile devices
- Standard property policies do not offer many of the most basic protections for computer equipment, such as breakdown cover
- We explain the benefits to customers holding a dedicated computer insurance policy
Any company attempting to limit its outgoings will seek to target as much of its insurance spend as possible on the assets that are most critical to its business.
It is perhaps surprising then, in this digital age when businesses rely more and more on computers, laptops, tablets and mobile devices, that computer insurance remains undersold.
Here, we explain why bespoke computer policies can be so valuable to customers and the gaps in cover that can exist without them.
Why do businesses need computer insurance?
Many businesses opt out of a bespoke computer insurance policy, but as Ian Hutchinson, Zurich’s Engineering Governance Manager, observes, this often leaves them at risk of gaps in cover.
He explains: “Just getting a basic Material Damage and Business Interruption (MDBI) policy won’t cover a business’s computer equipment adequately, particularly if that business is dependent on its computer equipment to trade. For example, while computer equipment would be covered for accidental damage, fire and theft under an MDBI policy, typically there would be a breakdown exclusion.
“And as far as BI cover is concerned, an insured would get no cover for the consequential losses from that breakdown, which can be significant.”
Additionally, computer policies cover losses as a result of erasure, destruction, corruption or distortion of software including ‘virus’ and malicious erasure, where there may be an overall E-Risks exclusion under a property policy.
Ian adds: “Computer insurance provides all-risks cover plus breakdown, which includes increased costs of working, and also costs relating to the recompilation of lost data. Overall, it offers much wider cover for little or no extra cost.”
Flexibility and global coverage
Another advantage of a bespoke computer insurance policy is that it offers a global solution, for example it will provide cover for work laptops/tablet devices and other personal data processing equipment used by sales teams on international business trips.
Ian says: “If you have a property policy, you are covering the property and its contents. Once those contents are not in the property, they may not be covered, or only covered within certain geographical locations.”
Ian also says. “Another significant benefit of a computer policy is the basis of claims settlement. A property policy will routinely provide an indemnity basis of settlement but we are all aware of how quickly computer technology advances. A computer policy will provide cover for the replacement of lost or damaged computer equipment with the next highest level of available technology should a direct replacement be no longer available, with no deduction for betterment.
We recognise the market is changing rapidly because our customers are using computers and other electronic devices in new and different ways, and that’s why flexibility is so important in terms of wordings, limits and the cover we offer.”
Ian Hutchinson, Engineering Governance Manager, Zurich
Our Computer Insurance is offered as an additional cover under our Engineering Combined policy, and offers less restrictive wordings than that found on most property policies. For example, if computer equipment is being transported in a company vehicle, there is no requirement for that vehicle to be kept in a locked garage when not in use. It is also easy to add additional protection, such as virus seek and destroy costs, or higher worldwide limits.
How we’re future-proofing our computer cover
Ian says: “As an insurer, being able to adapt to our customers’ bespoke needs is an absolutely critical requirement, as is understanding how these needs will change in the future.
“We recognise the market is changing rapidly because our customers are using computers and other electronic devices in new and different ways, and that’s why flexibility is so important in terms of wordings, limits and the cover we offer.
“Some brokers recognise this and understand the impact of computer failure to their customer and the specific impact in certain trade sectors. They need a product that helps them demonstrate both their expertise and shows that they understand the continuing changes in their customers’ business.”
You can also discuss any aspect of this article further by speaking to your usual Zurich contact.