Electronic Data Processing Equipment Insurance Policy Information
Electronic Data Processing Equipment Insurance. It goes without saying that one of the most fundamental developments in industry and science in recent years has been the explosive growth of electronic data processing. Virtually every business and industry utilizes some phase of this revolutionary development.
The Nationwide Inland Marine Definition includes electronic data processing equipment insurance (EDP) as inland marine.
Most states have approved this approach but a few have not. In any case, most of the coverage forms developed for this coverage are inland marine based. The American Association of Insurance Services (AAIS) has developed a coverage form that is a good model to use to review common coverage for this type of property.
Every EDP insurance coverage form insures three types of property: hardware, software, and website servers:
Hardware is the more tangible and easily valued type of property because it is the equipment.
Software is much more difficult to evaluate and replace because it runs the equipment and also stores the information on the hardware.
Website servers include servers both on the premises and off the premises that operate website software.
Hardware coverage may be compared to business personal property coverage. Software coverage is more similar to valuable papers and records coverage.
Electronic data processing equipment insurance protects your computer hardware that uses data including desktops, laptops, tablets, phones, servers, networks and more from theft, damage or loss - with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked EDP equipment insurance questions:
- How Much Does Electronic Data Processing Equipment Insurance Cost?
- What Property Does Electronic Data Processing Equipment Insurance Cover?
- What Property Does Electronic Data Processing Equipment Insurance Exclude?
- What Hazards Does Electronic Data Processing Equipment Insurance Cover?
- What Hazards Does Electronic Data Processing Equipment Insurance Exclude?
- What Are Electronic Data Processing Equipment Insurance Endorsement Options?
How Much Does Electronic Data Processing Equipment Insurance Cost?
The average price of a standard electronic data processing equipment insurance policy for small businesses ranges from $27 to $49 per month based on location, number of pieces of EDP equipment, claims history and more.
What Property Does Electronic Data Processing Equipment Insurance Cover?
All hardware is covered for the limit on the electronic data processing equipment insurance declarations. There is no requirement to list each piece of equipment individually.
The following groups of software listed on the declarations have separate limits:
- Programs and Applications - These items have a defined value because they were purchased as part of the hardware package or were purchased separately and added.
- Data Records
- Proprietary Programs - These items are more difficult to value because each one must be recreated internally. Coverage includes the costs to research and reproduce the information.
On-site and off-site website servers can also be covered. The coverage provided is similar to the coverage that applies to hardware and software.
What Property Does Electronic Data Processing Equipment Insurance Exclude?
PROPERTY NOT COVERED
The following property is not covered:
- Accounts, records, bills, abstracts, manuscripts, evidences of debt, deeds, program documentation, or other documents that are not in electronic format.
- Portable computers and similar electronic devices but only when checked as luggage and only for the perils of disappearance and theft.
- Contraband - This includes legal property in the course of illegal transportation or trade. Note: An employee could use the insured's computer for illegal trade. In this case, the computer is excluded.
- Property the insured rents, leases, or loans to others.
- Money and securities - This also includes currency, lottery tickets not held for sale, food stamps, and notes.
- The insured's stock in trade that consists of computers or software.
- Loss of a web host or Internet service provider due to either's bankruptcy, liquidation, or otherwise going out of business
What Hazards Does Electronic Data Processing Equipment Insurance Cover?
Electronic data processing equipment insurance coverage applies to risks of direct physical loss, except those specifically excluded.
What Hazards Does Electronic Data Processing Equipment Insurance Exclude?
HAZARDS NOT COVERED
There is no coverage for loss due to:
- Computer hacking and computer virus - except as a supplemental coverage (There is no coverage when a computer is compromised by a virus or hacking.)
- Contamination or deterioration
- Criminal actions by the named insured, officers, directors, or employees (There is coverage if employees destroy property but not if they steal anything.)
- Delay or loss of market
- Dryness or dampness of atmosphere, extremes of temperature, corrosion or rust unless directly resulting from physical damage to the data processing system's air-conditioning facilities caused by a peril not otherwise excluded
- Standard property exclusions - civil authority, earth movements, flood, nuclear hazard, sewer backup, and war
- Voluntary parting where someone is tricked or deceived into giving property away
- Wear, tear, depreciation, or obsolescence
What Are Electronic Data Processing Equipment Insurance Endorsement Options?
ELECTRONIC DATA PROCESSING EQUIPMENT INSURANCE COVERAGE EXTENSIONS
The limit for each of these electronic data processing equipment insurance extensions is on the declarations. They are not subject to any coinsurance provisions in the coverage form.
This is similar to the debris removal extension in the commercial property coverage forms.
Electrical And Power Supply Disturbance
This includes brownouts and blackouts that can result in data being erased.
This is similar to the preservation of property extension in the commercial property coverage forms.
Emergency Removal Expenses
There are expenses the insured incurs when property is moved. This extension pays for such expenses but subject to a sublimit.
Fraud And Deceit
There is no electronic data processing equipment insurance coverage for loss or damage to property voluntarily given to others. However, this extension gives the insured a small sublimit of coverage if the property was voluntarily given away due to deception or that involved accepting fraudulent bills of lading or shipping receipts.
Mechanical Breakdown Coverage
Loss due to parts or components of the hardware failing to work or to function improperly is covered. This includes loss due to improper installation.
The following supplemental electronic data processing equipment insurance coverages on the declarations are subject to either the default limit in the coverage form or the limit on the declarations, whichever is higher. The limits are not combined:
The insured may acquire a new location. If it does, a specific limit applies to that location for up to 60 days. The insured must report the acquisition to the insurance company and pay premium back to the date the location was acquired.
This coverage applies ONLY if there is a limit for it on the declarations.
This coverage applies ONLY if there is a limit for it on the declarations.
Newly Purchased Or Leased Hardware
The insured may purchase or lease new hardware. If it does, a separate limit applies to the hardware and to the programs that come with the hardware for up to 60 days. The insured must report the purchased or leased hardware to the insurance company and pay premium back to the date it was purchased or leased.
This supplemental electronic data processing equipment insurance coverage insures computers that are with the insured, partners, or employees when in transit or at their homes.
Pollutant Cleanup And Removal
This supplemental coverage is similar to the coverage provided in a commercial property coverage form.
Property In Transit
This supplemental coverage's default limit is $10,000.
Protection And Control Systems
The insured may have equipment that protects and controls the computers. In that case, a separate limit applies to damage to that equipment that a covered cause of loss/peril causes.
Recharge Of Fire Extinguishing Equipment
This supplemental electronic data processing equipment insurance coverage is similar to a similar coverage described with the commercial property coverage form.
This supplemental coverage insures equipment that scans, copies, stores, or retrieves paper documents for up to a separate limit.
This supplemental coverage pays a reward of up to a small limit in a single occurrence for information that leads to the conviction of the individual(s) who commit a covered arson, theft, or vandalism of the insured's electronic data processing property.
Sewer Backup And Water
This coverage applies ONLY if there is a limit for it on the declarations.
This supplemental coverage encourages the insured to back up its software. It provides a separate limit to apply to damage to backed up software kept offsite. The site must be at least 100 feet away from the insured premises.
This supplemental coverage insures telephones and similar types of communication equipment for up to a separate limit.
Virus and Hacking Coverage
Hardware, software and the web server are covered for virus and hacking damage for up to a separate per occurrence limit that is subject to a separate annual aggregate limit.
OPTIONAL ELECTRONIC DATA PROCESSING EQUIPMENT INSURANCE COVERAGES
This electronic data processing equipment insurance coverage form does not end with just the coverage listed above. Other coverage forms and many endorsements are available and the list continues to grow.
EDP coverage must adjust rapidly and often to stay current with changes in technology.
When reviewing any EDP coverage, it is important to determine the coverage form's edition date and the date it was created. Another coverage form should be considered if the definitions do not reflect current terminology.
The inland marine marketplace has many companies that are willing to write EDP and that understand that a "one size fits all" coverage form is not the right coverage for more technologically advanced companies.
Electronic Data Processing Equipment Insurance - The Bottom Line
Standard commercial property policies provide limited coverage for your computers and related hardware. Electronic data processing equipment insurance helps to pay to research, replace or repair lost or damaged data and software as a result of covered damage to computer equipment including certain power failures, computer viruses or hacking activity. There are many options and speaking to an experienced broker can help businesses find the best fit policy.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Additional Resources For Commercial Property Insurance
Read up on small business commercial property insurance, including how business property insurance protects your company's building's and/or their contents from damage, destruction, theft and vandalism.
- Apartment Building
- Business Interruption
- Commercial Flood Insurance
- Commercial Property
- Condo Association
- Contractors Equipment
- Duplex Rental Property
- Electronic Data Processing Equipment
- Equipment Breakdown Protection Insurance
- Homeowners Association Insurance
- Inland Marine
- Jewelers Block
- Manufacturing And Mercantile Rental Property
- Mobile Home Park
- Non-Residential Building Operators
- Office Buildings
- Safeco Landlord Insurance
- Shopping Center & Strip Mall
- Vacant Land
- Vacant Property
Rental property owners, real estate developers and property managers should keep an accurate survey of each property they own or that is in their care. This survey should include inventories of furnishings and equipment at those properties. These documents establish the extent of their insurable interest, facilitate the arrangement and placement of insurance and minimize controversy and confusion if a loss occurs.
Insurance coverage on property, general liability and professional or errors and omissions liability should be arranged and placed for every real estate and rental property risk.
The main goal of any commercial property insurance program is to protect the insured's real and business personal property. Buildings and their contents property usually represents a significant portion of its total assets, regardless of the size of the business. A commercial property program can provide the coverage you need if a loss should occur.
The ISO Commercial Property Building and Personal Property Coverage Form is an insurance industry standard that provides this needed coverage. As a result, it should always be reviewed and used as a benchmark for comparison when evaluating any commercial property coverage form.
This policy treats business personal property as more than just the contents of a building. When there is a limit of insurance on the declarations, property can be covered if inside the building or structure or within 100 feet of the building or premises and either in the open, or even in or on a vehicle.
There are many endorsements available to tailor the ISO Commercial Property Coverage Forms. Some are mandatory for all policies while others are mandatory for specific classifications and types of business. Others are optional and permit a standard form to be customized to meet a specific risk's coverage needs. Endorsements broaden, restrict, delete, modify, or add coverage.
These policies can provide the following additional coverages for small specific limits of insurance: debris removal, preservation of property, fire department service charge, pollutant clean up and removal, increased cost of construction and electronic data.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Contractors' Equipment, Fine Arts, Cyber Liability, Employment-related Practices, Automobile Liability and Physical Damage, and Stop Gap Liability.