Data processing coverage is a property-related extension that pays for costs to restore and recover data operations when systems fail due to covered perils or specified events.
Coverage mechanics
- It can cover lost data, reconstitution costs, temporary backup storage, and related professional expenses.
- Wording and endorsements define trigger events and waiting periods.
- Rebuild and replacement timelines are important for proving additional business interruption impact.
Claims logic
Adjusters verify causal connection between a covered peril and system outage. They also test whether the loss is data corruption, physical equipment failure, or a cyber event handled by another policy form.
Practical example
If a regional outage destroys transaction records during peak operations, the covered coverage pays for recovery resources while other coverage may address income loss from operational downtime.