Digital Assets & Business Insurance

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Insuring Digital Assets

Insurance began as a way to protect the stuff you own. In its early days, that meant tangible items that you can pick up or shake off a wall. Through the years, the type of ‘stuff’ we own has evolved with the introduction of the internet and the cloud. Today, businesses store a number of items electronically, referred to as digital assets.

What are Digital Assets?

Digital assets are files stored electronically on hard drives, servers, backup drives, and the cloud. These files can only be accessed on computers, online, and via other electronic devices. Businesses increasingly rely on technology solutions to house content because more business is conducted electronically today than ever before. Below is a list of some of the files considered digital assets.

  • Graphics
  • Photos
  • Videos
  • Electronic documents like bills
  • Client information including payment details
  • Financial files like Quickbooks data
  • E-mails

Protecting Digital Assets

Savvy business owners know to create backups of their digital assets in the event of a computer or server crash. Your digital assets can be stolen as well and unfortunately you can’t buy a commercial property insurance policy to protect you from this loss. Why? There is no way to assign a value to digital assets because, unlike tangible assets, you can’t buy a replacement.

While you can’t buy property insurance, you can protect your digital assets with another type of insurance.

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Cyber Liability Insurance

Cyber liability insurance protects your business in the event your digital assets are stolen via a cyber breach. Cyber or data breaches occur when a hacker breaks into your electronic system and steals valuable information like customer details. They sometimes hold this data until you release payment for its safe return.

There is no guarantee that the hacker will actually return the files once you pay. There are state mandated laws that require you to notify all parties impacted by the breach, and the average cost of a breach is over $100 per record.

Some cyber liability policies also include coverage for digital property replacement. If your hard work accidentally gets destroyed, the policy pays a reasonable amount for the time and effort it will take to recreate it.