Most everyone can appreciate why good recordkeeping is crucial to the success of a business or organization. Fewer people, however, understand the various ways in which insurance can protect these assets.
Whether you’re looking to safeguard original paper documents or electronically stored data, the following options for coverage are designed to suit a wide range of needs and loss situations:
Valuable Papers and Records Coverage
This coverage is intended primarily for restoring and replacing paper and other “hard copy” types of records. These include mortgages, copyrights, patents, insurance policies, and other contracts.
The originals may be the only copies in existence, and therefore the only versions legally enforceable. With no ability to reproduce these documents electronically, coverage for the costs of research and restoration is vital. Even where electronic copies do exist, this coverage remains relevant. The fees associated with having replacement documents signed, notarized, and otherwise made official can be considerable.
Electronic Data Processing Coverage
When electronic records are lost as a result of physical damage to the hardware and software used to store them, electronic data processing coverage is often the best option. One way to obtain coverage is as part of a base property policy, where it is typically included under a sublimit. Other methods include purchasing coverage as a separate endorsement with its own limit or under an inland marine policy.
Though originally intended only for losses occurring to hardware, over time electronic data processing coverage has been extended to losses caused by viruses, hacking, and other non-physical means of corrupting data.
Cyber Insurance Coverage
Cyber insurance policies provide more comprehensive coverage where losses involving electronic data are not physical in nature. These include hacking, phishing, ransomware attacks, viruses, and other causes of data corruption, deliberate or accidental.
They combine first-party coverage for data loss with third-party liability coverage, along with coverage for forensic investigations, notices to affected persons, and public relations after an incident.
Fine Arts Coverage
This one is a good option for those seeking to insure rare historical documents, such as an original deed or a contract bearing the signature of a noteworthy person. In this case, fine arts coverage is preferable because the value of the document is determined by its prospective sale price as a collectible, and not by any economic value conveyed or the cost of its restoration.
Accounts Receivable Insurance
Because accounts receivable records are considered to be so important to the interests of a company, they frequently require their own specific coverage with a separate limit. Accounts receivable insurance covers the cost to research and restore lost records of purchase and amounts owed.
Where it involves an insured loss, it also covers expenses to collect amounts owed, amounts that cannot be collected, and interest incurred on uncollectible accounts. Commonly excluded from coverage are damages to records caused by errors in programming, or in the installation or maintenance of data processing equipment.
One of the greatest benefits of accounts receivable insurance is that it provides coverage for both economic losses and the cost of restoring records. As coverage for research and restoration is often provided under another type of policy, the limit of the accounts receivable policy can be devoted solely to making good the economic losses of the insured.
Have questions about your property insurance claim? Feel free to contact Stark Loss for more information about how a Public Adjuster can help.