Electronic Equipment Insurance is essentially an "accident insurance" on "All Risks" basis for electronic equipment. It covers all losses except those specifically excluded, which arise suddenly and unforeseeably and materially affect the subject matter insured necessitating repair or replacement.Section 1:
Covers material damage to the electronic equipment.
Covers material loss or damage to external data media including the costs of reprocessing and restoring lost information
Provides cover for any additional expenditure incurred for the use of substitute EDP equipment not already covered under the policy.
Full and exact description of all equipment including name of manufacturer, type, serial number, voltage, age, condition of plant (e.g. non-runner), service and preventive maintenance.
The sum insured should be the current cost of replacing the equipment by new equipment of the same kind.
Basis of loss settlement is the new replacement value which is easily obtainable from local manufacturers' agents. Updating of the Plant Schedule is therefore easy as it is just a matter of phoning the manufacturer or his representative and is the basis for premium calculation. Insuring on other sum insured clauses e.g. actual amount, amount at risk, replacement value, declared value, market value, etc. would require revaluation to be first carried out by professional property evaluators This is expensive.
Due to the fast developments in the electronic field, the underwriters must be careful not to underwrite "obsolete" equipment.
Full exact description of type and quantity of media (i.e. floppy discs, magnetic tapes, flash disk and data base, etc. punched cards/paper tape, etc.).
The sum insured should be the amount required to restore the lost or damaged data media by new material and the cost of reproducing lost information
The information required would include:-
Must be in place to minimize the effects of a loss and must be continuously and regularly tested and updated to ensure its viability. Most components of electronic equipment are made out of plastic or PVC which is a very combustible material
For equipment operating under adverse environmental conditions like dust, chemical fumes, moisture or lack of air-conditioned rooms: Computer server rooms should be air-conditioned to reduce the effect of the adverse environment
The air condition equipment must also be included under the Plant Schedule and the maintenance service agreement for obvious reasons - playing a key role in preventing "degradation of the sensitive electronic parts by dust, moisture, heat, chemical corrosive fume, etc."
The following are the normal extensions with the additional charges:-