EDP insurance is an add-on to a commercial property insurance policy that covers your electronic data processing equipment from damage.
Electronic data processing (EDP) insurance covers electronic data processing equipment (i.e., computers, servers and disks) from accidental damage. Y2K never happened, but the thought of electronics glitching is still pretty scary for the small businesses that use them every day.
Whether you’re a startup that’s invested extensive capital in specialized equipment or a burgeoning marketing agency that provides its staff with new laptops, you want to insure your tech in the case of disaster.
In a nutshell, yes. If your small business deals with electronics at all — especially ones that are used or operated off-premises — you need EDP insurance.
In fact, you need EDP insurance if you work with any electronic media, data, or hardware during your daily business operations. 1
EDP insurance is an add-on, or rider, to a basic commercial property insurance policy. An add-on fills in crucial gaps in coverage that might remove an exclusion or add necessary coverage unique to your industry. Sometimes it can be written by itself, separate from any other policy.
The EDP policy covers electronic equipment belonging to three main categories:
Your EDP insurance provider will cover the replacement cost or the cost to repair these items, should they be damaged as a result of the following occurrences:
When determining the value of damaged goods, your EDP provider will come up with a figure based on factors like:
While EDP insurance typically features few exclusions, you still want to be aware of how your policy is underwritten to avoid getting surprised by uninsured damages.
Two of the most common perils that are not covered by EDP insurance are financial losses or damages caused by a utility service interruption. 2
For example, you may suffer a power failure that shuts down your hardware or stalls workflow. If your business operations rely heavily on your connection to power, double-check your policy to ensure that utility service interruption is covered.
Additionally, not all EDP policies will cover damages from earthquakes or floods.
Not all EDP policies are the same. When you’re searching for the right insurance policy for your business, make sure you are very familiar with the details of your coverage.
Before paying the premium on EDP insurance, be sure to nail down the following aspects of your policy:
Even after an intensive and scrupulous search for the best EDP policy possible, you might still be left wanting extra insurance coverage. In that case, consider paying for an add-on to boost your peace of mind.
These may include:
When it comes to EDP coverage, it’s worth it to make sure your wires aren’t crossed.
Along with standard commercial property insurance (and, of course, an EDP add-on), you may also want to consider purchasing other essential insurance offerings for small businesses:
Thimble arranges insurance with small businesses in mind. We care about your success and want to make sure you have the confidence you need to do what you do best. That’s why Thimble offers flexible insurance by the job, month, or year.
To buy general liability, professional liability, or BEP insurance immediately, click “Get a quote” or download the Thimble mobile app. Input a few details, get your quote, and when you purchase, you’ll have your Certificate of Insurance right away.
Everyone has bad days. While some of those days only involve spilling coffee, others involve spilling coffee on your computer keyboard.
On those types of bad days, you’ll be happy you have EDP insurance.
Whether you have a cartoonishly clumsy staff, operate in a theft-prone area, or simply want to play it safe, be sure all your electronics are protected with this must-have policy.
Otherwise, you’ll just have to pray that Murphy’s Law takes a day (or 365 days) off.
Sources:
Terri Hitchcock, JD Chief Insurance Officer, Thimble
Terri has 38 years of industry experience and knows a thing or two about insurance, so she reviewed and approved everything on this page.
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