Electronic data processing coverage is property insurance for computers, related equipment, media, and certain income-loss exposures tied to data-processing operations. In plain language, it is the coverage businesses use when standard property insurance is too narrow for their computer hardware, storage media, and operational dependence on data systems.
What the coverage is designed to address
Older commercial property forms were not always built to handle the special features of computer systems and data-processing equipment. EDP coverage developed to address exposures involving:
- computer hardware
- peripheral equipment
- media and stored data
- extra expense or income loss from system disruption, if included
The form can vary widely, so claims still depend on the actual schedule, valuation rules, and causes of loss insured.
Why it matters in practice
Businesses can suffer a large operational loss even when the physical damage is modest. That is why EDP claims often involve both:
- direct damage to equipment or media
- indirect loss from interrupted operations and data-processing capability
Insurers and policyholders need to know whether those indirect losses are handled under the EDP form itself, an extra expense provision, business interruption coverage, or not at all.
Practical example
A manufacturer’s server room is damaged by a covered water event, destroying network hardware and taking production systems offline. Electronic data processing coverage may pay for the covered damaged equipment and media, while related interruption costs may be handled under the form’s extra-expense or business-income provisions if included.
Related Terms
- Commercial Property Policy
- Business Interruption Insurance
- Extra Expense Coverage Form
- Equipment Breakdown Insurance
- Property Insurance