Does Business Insurance Cover Computer Equipment?

One of the biggest questions we hear from clients is whether or not business insurance covers computer equipment. The answer is both yes and no. If your company is like most, you rely heavily on computer equipment. Whether you use a laptop to write up estimates or a special system for storing data, making sure you have the proper amount of insurance is essential.

What Business Insurance Covers

Most business insurance policies include a provision for property coverage. This section offers replacement for items such as furniture, tools, supplies and other items essential for running your company should you ever have to file a claim. It also includes replacement of computer equipment in the event of a covered loss.

For businesses that only have a handful of computers, this coverage is usually sufficient for replacing your items during a fire or theft. However, the amount of coverage is usually capped at a specific amount. Companies with large amounts of electronic equipment may need a separate rider added onto their policy to raise that limit up to an appropriate level for the value of the equipment they own.

What Business Insurance Does Not Cover

Property damage coverage is designed to cover just that—physical property. This means that any data loss, or the cost of retrieving information from a damaged computer, is often not covered. (Although, this usually depends on whether or not your insurance carrier includes this option as part of your policy contract.)

It is also important to understand that there are a few things that business insurance does not cover in terms of electronic equipment. Data breaches, hacking and other similar related incidents are not covered under your property damage coverage. However, there is a certain type of policy you can purchase to protect your business against similar incidents; it’s called cyber liability insurance. There are also separate riders for companies with employees that leave the office with laptops, tablets and other electronics.

Each company will have its own specific set of needs when it comes to computer equipment coverage. So, it’s important to speak directly with your agent to determine what your policy covers and whether or not you need to add any special endorsements. By thinking about your needs ahead of time, you can rest assured that your business has proper coverage should an incident happen.