What is Electronic Equipment Insurance? Its Importance in Business

An Electronic Equipment Policy is an important insurance solution for businesses that are heavily reliant on electronic devices for their daily operations. Businesses today utilise a variety of electronic equipment, including barcoding systems, software, financial applications, printers, and scanners to function. An Electronic Equipment Insurance Policy provides comprehensive coverage against potential damages to these essential devices, ensuring the smooth functioning of business operations.

This policy provides protection against physical loss or damage to electronic equipment and data media, protecting businesses from the financial burden that occurs due to unforeseen circumstances. Whether it's damage caused by operational issues, electrical challenges like short circuits or excess voltage, faulty design, or defects in materials, the Electronic Equipment Policy acts as a shield for businesses.

In addition to covering repair or replacement costs, this insurance also addresses the increased operational expenses that may arise due to damaged electronic equipment. As businesses use more technology, getting an Electronic Equipment Business Insurance Policy is a smart move to reduce risks and strengthen the foundation of a secure and resilient tech-friendly business environment. Safeguard your electronic assets and ensure uninterrupted operations with the comprehensive protection offered by an Electronic Equipment Policy via InsuranceDekho.

Equipment is Covered Under The Insurance of Electronic Equipment?

Usually, insurance for electronic devices protects various electronic devices and equipment used by businesses every day. The covered equipment may include:

1. Computers and Laptops

Coverage is extended to desktop computers and laptops, which are essential for various business functions like finance, marketing, human resources, supply chain management, tech, etc.

2. Servers

Servers are covered so that all the data and applications are safe and available.

3. Printers and Scanners

These devices are protected to prevent damage or issues that could interrupt document management.

4. Cash Registers and Point-of-Sale (POS) Systems

Vital for retail businesses, cash registers, and POS systems are included in the coverage to ensure seamless transactions.

5. Barcoding Systems

Businesses relying on barcoding for inventory management receive protection for their barcode scanners and systems.

6. Communication Equipment

Coverage may extend to phones, fax machines, and other communication devices crucial for maintaining business connections.

7. Audio-Visual Equipment

Protection is often offered for presentation equipment, projectors, and audio-visual systems used in meetings and conferences.

8. Networking Equipment

These include routers, switches, and other networking hardware that facilitates connectivity within the organisation.

9. Data Storage Devices

Coverage is extended to safeguard against loss or damage to data storage devices, such as external hard drives or network-attached storage (NAS) devices.

10. Electronic Testing and Measurement Devices

Businesses in fields like manufacturing or research may have specialised electronic testing and measurement equipment that can be covered.

What is Covered Under an Electronic Equipment Insurance  (EEI) Policy?

The coverage under electronic equipment insurance (EEI) will provide coverage for the following:

1. Breakdown

The cost to restore equipment to its original state after an electrical or mechanical breakdown can be expensive – an electronic equipment insurance policy can help cover costs of the same. This includes the cost of dismantling electronic equipment and removal of debris. It also includes custom duty, if any.

2. Cost of restoring damaged data

In case of an eventuality that has led to damage to electronic equipment and if a backup system is available, consultants can be hired to recover lost data or repair damaged data. An Electronic Equipment Insurance Policy will cover the cost of restoring lost or damaged data.

3. Increased cost of working (ICOW) 

With electronic equipment damaged, employees might have to resort to manual operations which is most likely to increase the cost of working. Such a spike in operations costs can be covered under an Electronic Equipment Insurance Plan.

Note: This policy can cover damages caused by acts of terrorism if an add-on is taken or an extension is requested at an additional premium.

What is Not Covered Under an Electronic Equipment Insurance Policy?

Common exclusions from coverage under an Electronic Equipment Insurance Policy may include:

1. Wear and Tear

Normal wear and tear or gradual deterioration of electronic equipment over time may not be covered.

2. Intentional Damage

Deliberate acts of damage or destruction caused by the policyholder or employees may be excluded.
Unauthorised Modifications: Damages resulting from unauthorised modifications or alterations to the electronic equipment may not be covered.

3. Loss of Data

Data loss without physical damage to the electronic equipment may be excluded. Some policies, however, offer data recovery coverage as an optional add-on.

4. Software Issues

Problems related to software, such as bugs, viruses, or programming errors, may be excluded. Separate insurance or warranties may be needed for software-related risks.

5. War and Terrorism

Damages caused by war, acts of terrorism, or related events may be excluded from coverage.

6. Nuclear Hazards

Damage resulting from nuclear reactions or radioactive contamination may be excluded.

7. Government Actions

Losses caused by government actions, such as confiscation or expropriation, may not be covered.

8. External Cyber Attacks

Some policies may exclude coverage for losses arising from external cyber attacks, as these may be addressed by specialised cyber insurance policies.

9. Consequential Losses

Certain policies may exclude coverage for indirect or consequential losses, such as business interruption or loss of profit, resulting from damage to electronic equipment.

Sum Insured and Premium of Electronic Equipment Insurance

The sum insured for an Electronic Equipment Insurance Policy is determined on the basis of the replacement cost of equipment, the cost of restoring external data, and the increased cost of working.

The premium for an Electronic Equipment Insurance Policy will be determined based on the value of the equipment and the nature of its usage.

Take Away

It's important to review the specific terms and conditions of the Electronic Equipment Insurance Policy to understand the extent of coverage and any exclusions that may apply. Businesses should tailor their coverage to suit their unique technological needs and vulnerabilities. Additionally, businesses may choose to supplement their coverage with other insurance policies to address specific risks not covered under the Electronic Equipment Insurance Policy or look for add-ons/riders to take along with the policy.