Electronic Data Processing Insurance 101: How To Protect Your Digital Assets
It’s almost impossible to run a business without computers these days. Communication, accounting, and sales have all gone online. Therefore, if anything happens to a company’s digital operation, business grinds to a halt. Fortunately, insurance carriers now provide electronic data processing (EDP) coverage to protect large and small companies from digital disasters. Here’s a quick guide to the basics of EDP insurance.
What is electronic data processing insurance?
EDP coverage is a type of insurance that protects digital assets from common perils. It often applies to:
- Hardware: Desktop computers, servers, smartphones, tablets, laptops, etc.
- Software: programs, systems, applications, data, etc.
- Media: drums, discs, tapes, memory cards, etc.
What does electronic data processing insurance typically protect against?
As we always say, every insurance policy is different. However, EDP coverage usually offers protection against disasters such as hacking, power surges, short circuits, computer viruses, property damage from fires or natural disasters, mechanical breakdown, and damage from temperature changes.
What other coverage might also be included in electronic data processing insurance?
Some policies may offer additional coverage options such as cyber liability insurance and business interruption insurance.
Cyber liability insurance helps cover the cost of client notification, data loss, client credit monitoring, etc.
Business interruption coverage helps pay for expenses incurred while your digital equipment is offline. Those costs could include alternate equipment rental, payroll, taxes, etc.
You can also find coverage for needs like utility interruption, equipment in transit, offsite equipment, equipment at a newly acquired location, and newly acquired equipment.
Do carriers require security measures to qualify for electronic data processing insurance?
Many companies require their EDP clients to take specific measures for securing data and equipment. These precautions could include tasks such as sufficiently creating and storing data backups.
If you’re interested in EDP insurance, Hibbs agents are ready to answer more questions and find the right policy for your business. Just give us a call.