Electronic Equipment

This section of the policy looks to cover electronic assets. Some examples include computers, scanners, servers and other similar equipment.

The correct setting of your sum insured is crucial, to avoid Proportionate Underinsurance penalties applying at claim stage. Invariably, the sum insured must always represent the New Replacement Value of all insured electronic equipment,  inclusive of VAT.

Increase in Cost of Working is an often overlooked extension of cover under this section. This extension provides for the increased costs, up to the sum insured, to maintain operations following loss of key electronic assets.

Adequate disaster recovery planning plus insurance cover is the answer

There are, however, ways and means of protecting businesses from failing after both natural and man-made perils have effectively downed the IT infrastructure – adequate disaster recovery planning and business insurance that covers all electronic equipment.

With the recent transition to a 24/7 economy and the importance of IT as the hub of any business’s critical function, an effective plan to protect this data has become a priority and should go hand-in-glove with an efficient risk management strategy.

Today, businesses are increasingly more reliant on fax machines, computers, photocopiers, switchboards and even burglar alarms for their success, but when these technological aides are compromised by hackers, sabotage, lightning, theft or other perils, entire corporations can and will be brought to their knees, unless covered against such perils.

Eskom’s energy supply debacle an example of risk

In South Africa the vulnerability of electronic equipment was highlighted by Eskom’s supply debacle when power outages were the norm. Big businesses were outraged that this parastatal was unable to give sufficient due warning of these outages, thereby preventing a workable disaster recovery strategy. These kinds of risks are not going to disappear in a hurry and to remain competitive, businesses need to factor in the possibility of a data disaster and plan adequately for it.

It has been estimated that the big corporates spend between 2% and 4% of their entire IT budget on disaster recovery planning; a significant sum in anyone’s books. But a cheaper alternative is available through any reputable insurance company.

Corporate insurance covering electronic equipment generally protects the business against risks such as fire, wind, water, hail, snow, lighting, power surges, explosions, theft and accidental damage but will exclude wear and tear and the dreaded incidence of computer viruses.

Optional extensions to standard business insurance: electronic equipment cover

Approach your insurance broker for optional extensions to the standard cover including:

• Increase in cost of working
• The Reinstatement of Data
• The Telkom Access Lines (e.g. ADSL line)
• Incompatibility cover