Whether there is a syncing problem while uploading data to or from The Cloud, data is corrupted by malware, or storage hardware is physically damaged, data loss can be a serious hit to any business. If someone were to lose physical files with no other copies with important information on them, that could cause a number of problems. This is certainly the case, as well, with digital files.
Acquiring data loss insurance, however, can cover the financial problems involved in virtual items being out of access. While general liability and property insurance would cover physical items being stolen or lost, cyber insurance is often required to handle cases of digital loss. What can this type of insurance do when there is data loss?
Restoration or Replacement
Any costs involved in either repairing the damaged data or completely recovering anything lost would be a part of data loss insurance. This can include but is not limited to anything lost due to theft, virus, malware, misplacement, corruption, fire, flooding or wrecking.
If a company experienced flooding in their building and had to take care of the water damage before continuing regular business, error and omissions (E&O) insurance would often include a business interruption policy as closing down for a few days can create financial losses and other difficulties. The same can be said of data loss, as this may put a pause on any activity that requires that information. Data loss insurance, however, typically will cover for lost time.