Properly Insuring Your Business Computer Equipment

The computer equipment you purchase for your business may be one of the most important pieces of business property investments you make. Computers are necessary for almost every aspect of business today and the data stored within is crucial to your business. Whether you are an entrepreneur undertaking a new venture or a long-established business owner, you need to make sure the computer hardware and software are
insured. In the event of a fire, flood, or other catastrophe, knowing your computer and its data are protected not only provides peace of mind but is an investment in your business’s future.

Review your current business policy with your insurance agent and determine how much coverage is provided for computer hardware and software. If the amount of computer equipment your business owns exceeds the coverage provided, you will want to increase coverage
to make certain you are properly insured in the event of a loss.

As with all purchases for your business, you will need to keep the receipts for all computer equipment purchased including all office electronics ranging from computers, fax machine, telephones, and copiers. If there is a claim, you will be asked to produce the receipts for the equipment lost. Bear in mind that your computer equipment depreciates so the computer you paid $1,000 for five years ago will not be worth that amount today. If you have purchased equipment to upgrade your computers, keep those receipts as well.

Your insurance coverage may protect the equipment when it is in the office, but are you covered if you work from a laptop or a tablet? If your laptop or tablet is stolen from your vehicle or during travel, are you insured? These are questions to discuss with your insurance agent. You do not want to be blindsided in the event of a loss only to discover your insurance policy only covered your equipment if it remained at the business site.

Determining how much coverage necessary for the computer equipment in your business is the first step in the process. Armed with that information, you can contact your business insurance provider to determine what your included limits are in order to determine how much additional coverage you may need.

Be aware that insurance policy reimbursements vary in the event of a computer related claim. Some insurance companies pay you when you file a claim for a loss while others provide reimbursement only after you have replaced the lost, stolen, or damaged equipment. Ask your agent about the type of reimbursement plan your policy provides.

Business property insurance protects you against lost property or damage to any of your business property and that includes your computer and other office electronics.

One of the many decisions you will have to make is whether you want your equipment insured under an actual cash value policy or under a
replacement cost coverage policy. Actual cash value will provide reimbursement in the dollar amount you paid for the equipment, regardless of its age. With a replacement cost policy, the equipment will be replaced or you will be reimbursed for a dollar amount of what it costs you to replace the equipment today, regardless of its age. An actual cash value policy typically has a lower premium but in the event of a loss you may not be able to afford the lower settlement amount that would be offered.

Coverage to discuss:

• Computer and media: This policy offers insurance coverage for a business’s computers, media, and peripheral components. The coverage can also cover costs for the researching and replacing of lost or damaged data. Computer and media coverage may provide a payout in the event of a computer virus, power, or other equipment failures because of damage to the computer software.
• Electronic data coverage protects the business owner and provides coverage to replace or restore electronic data that has been destroyed or corrupted as part of a covered loss.
• Computer interruption insurance. This coverage assists with business income and/or additional expenses that incur from a business having its operation interrupted because of the corruption or destruction of electronic data that arises because of a covered loss.

The premiums and amounts of coverage vary by insurance provider, the liability limits, and deductibles you choose. The savvy business owner will want to make an appointment with his or her insurance provider and review the policy to verify the business’s computer equipment hardware and software are properly insured. When dealing with a loss or while in the midst of a catastrophe, is not the time to discover you were underinsured.