Insurance is essential
| DOI | https://doi.org/10.1108/eb057186 |
| Pages | 33-34 |
| Published date | 01 February 1981 |
| Date | 01 February 1981 |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Insurance
is
essential
The insurance of a computer installation involves
more than simply the value of the hardware. In this
article printed with the permission of Business Com-
puter Newsletter, a broker discusses some of the
problems which have to be considered.
As soon as you have acquired a com-
puter it is obvious that, in just the
same way as copiers or typewriters
have to be insured, it is necessary to
take precautions against loss or dam-
age.
A typewriter or copier, however,
is simply a piece of hardware: the loss
of its use is not going to affect the
running of a business in any signific-
ant fashion nor for any significant
period of time. The risks to which
such hardware is subject are straight-
forward: accidental damage, theft and
so on.
When it comes to the computer
installation, however, the implica-
tions are far more important and the
effect which loss of use can have can
be quite disastrous. The proper insur-
ance of the computer installation and
its activities is therefore a relatively
complex matter.
As the use of computers has grown
- particularly in the last two or three
years,
since every other small business
has been acquiring one - so more and
more insurance companies and brok-
ers are handling the business. It is
therefore wise, when it comes to the
question of insurance, to ensure that
you go to a company or to a broker
which has acquired the necessary
experience. Any reliable broker or
insurance company will, of course,
refer you to another if they have no
experience in the matter, but the
names of a few companies, (chosen at
random) who do handle this business,
are listed at the end of this article.
How much cover?
The first point to discover is just
how much cover you need. This factor
is based primarily on the way in which
you have acquired the computer. If it
has been bought outright then it is, of
course, entirely your responsibility. If
it has been leased or rented from the
manufacturer then the real owner will
specify the amount of insurance the
user must buy to cover the hardware
itself.
Sometimes he makes the user
responsible and at the same time
insists on a certain level of mainte-
nance being carried out. This should
be clearly specified in the contract
between the owner and the the user,
and the broker or insurance agent will
be able to see from the contract
exactly how much insurance the user
must buy.
Loss or damage to the equipment
itself is a relatively straightforward
matter to estimate and related to the
conventional risks such as fire, flood,
malicious acts etc. However it is quite
common for the insurer to exclude
loss or damage caused by the neglig-
ence of the user, in which case this will
have to be considered separately and
the insurer will have to examine the
conditions in which the hardware is
installed, who has access to it, who
cleans it, how well trained the
operators are and so on.
FEBRUARY/MARCH 1981
33
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