Data Center Insurance

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Why do data centers need insurance?

A system crash or prolonged outage could cost your clients a lot of money, which could lead to an expensive lawsuit. Business insurance covers legal expenses when a client sues over lost data or failure to provide managed services. It can also cover injuries, fires, data breaches, and auto accidents.
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One application, multiple quotes

With Insureon, data center operators can compare insurance quotes from top U.S. providers. One easy online application is all it takes.

Got questions? A licensed insurance agent is on hand to answer questions about your unique insurance needs.

What types of insurance coverage do data centers need?

These insurance policies cover common risks for data centers.

Errors and omissions insurance icon

Technology errors and omissions insurance

Tech E&O covers legal expenses related to your work performance, such as a client who sues over a data center outage. It's also referred to as professional liability insurance.

BEST FOR
  • Downtime and data loss
  • Data breach lawsuits
  • Breach of a service level agreement (SLA)
Cyber insurance icon

Cyber insurance

This policy helps data centers financially survive data breaches and cyberattacks. It's strongly recommended for any business that handles personal information.

BEST FOR
  • Client notification expenses
  • Fraud monitoring costs
  • Data breach investigations
General liability insurance icon

General liability insurance

This policy covers basic third-party data center business risks, such as physical damage to a client's property. It's often required for a commercial lease.

BEST FOR
  • Slip-and-fall accidents
  • Damaged customer property
  • Libel and slander lawsuits
Fidelity bond icon

Fidelity bonds

Fidelity bonds compensate your clients if an employee at your data center steals from them or commits fraud. Your clients might require you to purchase a bond.

BEST FOR
  • Unlawful data access by an employee
  • Unauthorized money transfers
  • Other employee theft or fraud
Workers’ compensation insurance icon

Workers’ compensation insurance

Most states require workers' comp for data centers that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.

BEST FOR
  • Employee medical expenses
  • Disability benefits
  • Lawsuits from workplace injuries
Commercial auto insurance icon

Commercial auto insurance

This policy covers the cost of an accident involving a vehicle owned by your data center. Most states require this coverage for business-owned vehicles.

BEST FOR
  • Car accidents
  • Vandalism and theft
  • Weather damage
Looking for different coverage? See more policies.

How much does technology business insurance cost?

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A data center with only a few employees will pay less for insurance than a larger business.

Factors that affect technology insurance premiums during underwriting include:

How do I get data center insurance?

It's easy to get business insurance for data centers if you have your company information on hand. Our insurance application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:

  1. Complete a free online application.
  2. Compare insurance quotes and choose policies.
  3. Pay for your policy and download a certificate.

Insureon's licensed agents work with top-rated U.S. insurers to find coverage that fits your data center, whether you work independently or hire employees.

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Common questions about data center business insurance

Review answers to frequently asked questions (FAQs) about data center insurance policies and more.

Why is business insurance important for data centers?

Data center business owners might think their business is low-risk compared to others. Unfortunately, even a trivial lawsuit can still have a serious impact on your business, whether you're just starting your business or are well established.

Here’s a closer look at some key insurance products and why you should carry them:

Are data centers required to have insurance?

Carrying the right insurance coverage makes it easier for data center businesses to protect their livelihoods and qualify for contracts and leases. Depending on your state, some policies are required by law.

In most cases, workers' compensation coverage and commercial auto insurance may be required if you have employees and own a business vehicle. If your IT infrastructure business doesn't have employees or uses personal vehicles for work, your insurance requirements will differ in that you won't be required to obtain workers' comp and will need HNOA insurance instead of commercial auto.

Even when not required by law or regulations, there are several reasons why data center insurance is important:

  • Financial protection: Because data centers are extremely expensive to operate and maintain, insurance provides a financial safety net should anything happen to your business.
  • Trust: Insurance reassures your customers that you're committed to protecting their data from vulnerabilities and maintaining smooth service for them.
  • Compliance: In order to obtain certain contracts or sign leases, your business may be required to carry specific types of insurance.
  • Risk management: With the right insurance coverage, you're better prepared to handle and recover from various risks, including malicious data breaches and weather events/natural disasters.
  • Investment opportunities: Investors are more likely to partner with your data storage business when it's adequately protected from potential risks and exposures.

Do data center professionals need professional indemnity insurance?

Much like other tech companies, data center companies aren't required by law to carry professional indemnity insurance. However, it should be a key component of your business continuity plan.

Professional indemnity insurance, also called professional liability insurance or errors and omissions (E&O) insurance, protects you in the event a client files a lawsuit against your data center business for an error, mistake, or professional negligence.

You can bundle professional liability insurance for data center businesses with cyber insurance into a technology professional liability policy, which is more commonly referred to as tech E&O. This would be a more affordable insurance option than purchasing the policies individually.

What's the difference between first-party and third-party cyber liability insurance?

When buying tech E&O and cyber insurance, you may come across the following terms:

  • First-party cyber insurance: This coverage covers cyber risks at your own business, such as a data breach that exposes your customers' email addresses or other personal information stored by your company. It's also called data breach insurance.
  • Third-party cyber insurance: A third-party cyber policy covers your responsibility for cyber risks that harm another business. For example, your data center might offer security services to your clients. If a weakness in that security causes your client's data to be exposed, then your data center could be held liable for the breach.

You can typically add first-party cyber coverage to your general liability insurance or business owner's policy. Third-party cyber coverage is included in tech E&O insurance, which bundles cyber insurance with errors and omissions insurance.

How can I save money on data center insurance policies?

The insurance industry has a wide range of pricing for the same policies, which is why it's important to shop around. You can start by comparing free business insurance quotes from leading insurance companies with Insureon.

Our licensed insurance agents can help make sure you get the right, most affordable coverage for your data center. Most small businesses can get insured and download a certificate of insurance within hours of applying for quotes.

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