Computer Insurance Fills Significant Under insurance Gap
Having specific cover for your computer and electronic equipment may seem like a luxury, but after all, you can claim for loss and damage on your property insurance policy, can’t you?
The answer to that is likely to be ‘no.’ Following major cyber-attacks in the past seven years, insurers and insureds often debated whether vague policy wordings actually provided cover for cyber-related losses. In the past three to four years, the insurance industry has tightened up wordings, eradicating ‘silent cyber’ coverage. Now, your property policy is likely to specifically exclude any cyber-related losses, which could run to eyewatering amounts.
Businesses not working closely with a broker may not realise this, which is serious when hacking, viruses, and corruption of company data are on the rise. 32% of businesses (59% of medium-sized and 69% of large) recalled a cyber-attack in the year to April 2023. Cybercriminals scan any device connected to the internet at least once every 30 seconds, seeking potential weaknesses.
Your property insurance may, however, do more than exclude cyber-crime-related computer damage. Most policies only cover hardware stolen or damaged by a fire, flood or storm and will not provide compensation for software or data. Some of this could be fundamental to the running of your business. Cover is frequently also restricted to incidents occurring on the business premises, not outside.
With the increase in hybrid working, shared workspaces, working on the go, and working from home, this is problematic. Of employed and self-employed workers, 46% have experienced lost or damaged computer equipment while working from home or commuting to the office.
A computer insurance policy can step in here, covering losses that a property policy cannot. Take, for instance, theft by a third party who has not forced entry or computer cables chewed by vermin or pets. Perhaps damage caused by a power failure or interruption of the power supply, or spillages and accidentally damaged laptops?
Such policies define ‘computer’ broadly, including mobiles, PCs, and laptops, removable satellite navigation systems, broadband modems, digital cameras and projection equipment, audio-conferencing equipment, and photocopiers.
Options to extend the cover also exist. You could protect yourself from increased costs, such as overtime or rental of temporary premises following an incident. You could also add cyber liability cover.
Recreating the data is often more expensive than the cost of replacing a laptop or PC, so having the means to pay experts to do this can be invaluable, however, the data was lost. Lost databases, stock inventories, and records can all be covered with data ‘found’ or rebuilt by IT gurus.
Remember that ransomware attacks are commonplace, and the National Crime Agency advises against paying ransomware to criminals. A system could still be infected, and the criminals could return. Arm yourself with a good computer insurance policy, and you can enjoy restored and unencrypted data in a fast time frame.
To summarise, a specialist computer policy covers losses for which so many businesses are not insured. Don’t let it be you, especially when we’re here to help you cover those gaps. Contact L Wood Insurance Brokers at 1888 903 7340 to find out more.