A Real-Life exali Damage Event - Loss of Data on Your own Hard Drive

Loss of Working Documents

Data security and reliable data backup has a very high priority in many projects in IT and is taken seriously. Unfortunately, however, we keep seeing that there is often a gap between theory and practice. This is also the case with this damage event where the IT service provider lost their own data as a result of a faux pas.

In doing so, they committed the cardinal error when it comes to data: They forgot to do regular backups. They had saved certain data on only one external hard drive, which was stored most of the time and only used relatively rarely. When the computer specialist wanted to access their electronic work documents at some point, the problems mounted: For some reason, the hard drive was no longer readable.

A Happy Ending in a Roundabout Way

After overcoming the initial shock, our policyholder reported the damage to the exali customer service. After clarifying the facts with the insurer, the insurer approved data recovery measures and assumed the costs.

The computer specialist’s worries, however, weren’t over yet: The first recovery attempt by an external specialist company failed. The efforts nevertheless resulted in costs of just under 350 euros. Due to the importance of the data, a second attempt was made, which cost over 1.700 euros. This time the computer specialist was lucky and gained access to 85 percent of the stored data. That was enough to reconstruct the missing 15 percent and gave the IT service provider full access to their files again.

Also Well-Protected for First-Party Claims

Cases like this, where the insured person suffers damage themselves, are insured through exali Special First-party Claim Insurance at no additional cost. This is an module of financial loss liability that is not customary in the industry.

In this specific case, the policyholder benefited from the extra protection granted by the paragraph “Loss of working documents for order processing” in the insurance conditions. This means that the insurer will reimburse “the required costs for the return or restoration of own documents (including electronic documents) that an insured person requires to complete an engagement.” After subtracting the agreed deductible, the insured IT service provider received a reimbursement of around 1.800 euros, which they would have had to pay for restoring their data without their professional indemnity insurance.

Conclusion: Damage Occurs Inside And Outside a Company

In their daily work for their clients, many self-employed people forget that errors can affect not only their clients, but also their own systems. Such a loss can be a threat to the very existence of the company especially when the data is needed to carry out customer orders.

That’s why Professional lndemnity for Digital Professions from exali, in addition to classic liability cases – namely damage to third parties – certain first-party damage is also insured, which could otherwise endanger your business. This means that you’re well prepared for both third-party and and first-party claims.