Equipment Insurance

[iWF-Jacob]

Hey all,

 

We're reviewing our insurance policies and wanted to reach out to the community to see what everyone else is doing.

 

I am wondering what others are doing as far as equipment coverage for servers and networking equipment housed at an off-site datacenter -- do most of you just add a rider to your business owner's policy or are you using a separate policy to cover acts of god, fire, etc etc.

 

Who are you using? How are the rates, coverage, CS, etc.

 

Thanks for your feedback!

 

 

[zomgmike]

Do whatever makes the most sense financially....which will probably ultimately be getting the infrastructure insured separately from other general business insurance.  Insurance is one wacky realm, though.  You'll probably get 50 different answers to that question if you ask 50 different people.

 

[swedendedicated]

From own experience I can tell you that the rates will not be funny if you include "fire" in the insurance. Even with automated fire suppressors. That's because some fire suppressors destroy your hardware (not the ones that remove the air, only the foam ones) We only insure our routers.

 

[tk-hassan]

insurance is not very common practice in datacenter business

 

[robbyhicks]

If your in tier 3 or 4 facilities, you shouldn't need it.  However if you're hosting from your own building / office, definitely look into it.

 

[drmike]

insurance is not very common practice in datacenter business

Which is odd here in the States I'd say since I've had multiple DCs require such self-insurance to place gear within their facility.  DCs clearly want no legal liability for anything that could happen.

With that noted, I've prior modified business insurance to cover such.   Insurance is iffy and inconsistent so that route may be fine in spots and cost effective and others it might just not be doable at all.

Know one of the companies we manage here has a combo policy also that covers all professional work, liability, etc. as well as theft and destruction type claims (because we had to do deal with such when some hoodlums went smashing windows and taking random "metal" they had no clue of what it was at our parts garage).  We deal with same insurance carrier in combo policy when submitting new relationship pre-qualification packages. Nature of the work in theory has us in role where we could take a tower offline causing a regional cascading outage potentially, very bad and it happens from time to time when site blueprints are wrong and someone goes running a backhoe and catches fiber in the ground.

With that said, that company and way I've done insurance historically is sitting down with a human in person.  Since business insurance isn't so simple for all this, was referred elsewhere early on.  Still very apprehensive about generic insurance or online for such.   Not into reading 200 pages of legalese and deciphering.   Nice to have human I can call on a busy Monday morning and ask what something is going to cost us due to something ongoing --- without large delay, my research, etc.  Good insurance folks are as vital as a good accountant or anything else necessary for real business.

 

[qps]

TechInsurance understands what you mean when you say co-location (compared to the blank stares I received when I talked to a few other insurance agents) and can help you build a policy that includes coverage for equipment that is co-located.  

 

[MarkTurner]

insurance is not very common practice in datacenter business

I wouldn't say that at all, almost all decent datacentre operators require substantial insurance. I know our colocation businesses require explicit insurance with Yomura named on the policy.

We've been using Aon for the past 15 years and been very happy with their coverage. As we add buildings they will provide the necessary documentation within 24 hours. I've had instances where we've entered a building and found that we need high insurance coverage and had revised documents on the fax to the building owner in less than an hour.

Aon provides us with building insurance including fire, terrorism, etc; workers comp (compulsory in many states), theft, etc, etc. I don't know the price but I know that they have always gone the extra mile.

 

[ItsChrisG]

insurance is not very common practice in datacenter business

wtf? that truly is a wtf statement.

it is very common and REQUIRED. you wont be getting any type of space from any real datacenter without proof of usually $1-$2 MILLION MINIMUM coverage with the datacenter assigned as payable as well.

Also, do you think any leasing company is going to give you equipment without requiring insurance coverage?

If you don't have liability and E&O insurance, you are at high risk of getting screwed (and you probably brought it on yourself).

 

[Steven F]

Redacted.

 

[TurnkeyInternet]

Any colo facility should of already required you to have insurance to move in, that could be a red flag to double check what colocation facility you are hosting in!  We, and most all I've ever come across, require those leasing/renting cabinets to have insurance in place (liability, worker's comp, etc) and basically state they have insurance covering the value of their equipment.  Most will require you to name the colo facility on these insurance forms as the 'insured' as well.

That said - to answer your first question - the value of your equipment for replacement due to flood, fire, earthquake, theft, employee tampering, etc should be part of your business insurance policy, you set the limits along with liability limits.  Its a conversation to have with your insurance agent, and I'd suggest you use a broker that shops it to at least 2 or 3 insurance carriers. 

The cost for insuring your equipment is pretty minimal compares to that of having general business liability insurance and for a business with maybe $100k in equipment in a colo its probaby $100's of dollars a year to have the equipment replacement cost covered. (thats a guess).  It scales down a little after you have years in business and buy other parts like your liability insurance from the same carrier.

good luck

 

[iWF-Jacob]

Howdy all, thanks for all of the comments and suggestions.

Perhaps I should clarify: We currently have insurance, it's a rider on our business insurance however are looking at reviewing it to make sure it was the correct decision to make, hence the question of what you all are using.

Thanks!

 

[Steven F]

TechInsurance understands what you mean when you say co-location (compared to the blank stares I received when I talked to a few other insurance agents) and can help you build a policy that includes coverage for equipment that is co-located.  

I contacted them our of curiosity and they basically declined to offer us a quote because we allow our clients to host adult content.

 

[qps]

I contacted them our of curiosity and they basically declined to offer us a quote because we allow our clients to host adult content.

You need to explain to them that you aren't the one hosting the adult content, that it would be on servers rented to your end customers.

 

[Steven F]

You need to explain to them that you aren't the one hosting the adult content, that it would be on servers rented to your end customers.

You may want to verify. We've been declined.


Our carriers are declining the submission due to the applicant allowing clients to host adult content on the applicant hardware. Our carriers are not a market for operations involving adult content or gambling.

 

[qps]

You may want to verify. We've been declined.


Our carriers are declining the submission due to the applicant allowing clients to host adult content on the applicant hardware. Our carriers are not a market for operations involving adult content or gambling.

You may want to call and talk to someone there and explain what kind of business you are involved in.  They probably aren't communicating that properly to the underwriter.

 

[northhosts]

We insure all of our equipment, you'd be mad not to! you have to cover yourself for every eventuality.

 

[Steven F]

You may want to call and talk to someone there and explain what kind of business you are involved in.  They probably aren't communicating that properly to the underwriter.

Damnit, they're closed right now. I'm going to give them a call tomorrow. I'm really curious right now and I'd be interested in switching to someone who actually knows the business.

 

[ocitysolutions]

We got our insurance through TechInsurance. The process was very straightforward and we had the documents our datacenters needed within hours.

The cost is nothing compared to what you're out if anything happens to your hardware.

 

[Steven F]

Called in and was told that the insurance provider was not interested in providing insurance to us because we allow adult content. Simple as that. You guys might want to just call in and verify!