The data on a hard drive can be the most valuable possession in an office or a home.
We often hear from people who, following a disaster, are most concerned with retrieving their family photos or trying to rescue the essential business records that will allow them to keep running. And sometimes, customers of ours mention that their insurance company is helping them recover what’s so valuable to them: their data — their manuscript, their home movies, their digital records of their lives.
In a survey by Harris International, for example, many have indicated that they would not accept $1 million to lose all their family photos. If an event causes their hard drive to fail, a typical cost to retrieve them is often between $600 to $1,200.
Our interest is whether insurance companies are helping to guide their clients toward successfully recovering an asset that they could value more than their house. We have been reaching out to many insurance companies to see what their policies are for covering the cost of data recovery if one of their clients has a storage device fail.
Not surprisingly, some insurers are in tune with how valuable data can be to their clients and offer to cover the costs of a data recovery after certain events, or as an option. Liberty Mutual’s press office, for instance, said that data recovery would be paid for under “covered perils,” such as a storm, power surge, or break-in. Businesses would have greater coverage for data recoveries, but it would of course be subject to whatever deductible is on the policy. Farmers Insurance also has helped clients with the cost of data recovery. Here is the statement from their press office:
“Farmers Insurance offers an optional coverage that includes the cost of data recovery. Coverage is provided when the storage device is damaged by any cause of loss not specifically excluded. Most catastrophic losses, such as fires, hurricanes, and tornadoes would be covered. However, certain losses, such as flood, wear and tear, operator error, would not be covered due to existing exclusions in our policy.”
We think it’s an interesting issue and one that we will continue to explore in preparation of a white paper and other publications on this topic. This information could be particularly valuable for small businesses, especially those that keep essential records on RAID devices. Due to the nature of small business’ data, the recoveries typically are urgent and involve a network storage device, which means costs are significant.
We’d recommend that anyone with a small business policy look to see whether data recovery is covered and under what circumstances. We’d be happy to hear from small businesses about what they find. Also, if you are a client of ours who has had an insurance company help you cover the cost of recovery, please let us know. Finally, if you are with an insurance company that covers data recovery, please let us know: we want to help make people aware of this valuable service.
About Lee Sensenbrenner
Director of Product Marketing at Gillware, Inc.; former journalist and chief speechwriter for a governor; economics degree from UW-Madison.
It is very tough to estimate the real cost of data. Insurance company will try to minimize the data recovery cost so that it has to pay less amount of money to insured.