Communications Failure Insurance Coverage

Insurance Premium Mitigation

The cost of set up, maintenance and auditing of a telecom disaster recovery plan can be offset to some extent with the deduction some insurance companies offer to business with DR in place.

An effective DR plan supported by documented maintenance and auditing will be considered risk mitigation by some insurance companies and as such a factor in premium reduction.

At another level an insurance company may even require communications backup systems be in place before underwriting a business, particularly if earnings are to be protected. The decision to offer coverage may be dependent on comprehensive phone system backup and business continuity protection.

Communications Coverage

Insurers offer an array of Communications Indemnity Insurances covering phone systems and hardware, losses caused by downtime and during the recovery, coverage against claims for Service Level Agreement breaches, and compensation for advertising made less effective during comms downtime.

Comms Outage Costs

Investigations following outages due to communications failures quite often reveal an underestimation by business when anticipating associated losses. The underwriters themselves can often provide the estimated costs incurred during any loss of business continuity due to a telecoms outage.

Insurance companies will underwrite revenues lost during a telecoms outage up until normal business operations are restored. 'Normal operations' should be defined in the policy.

Once normal operations are resumed and the assessors begin their review, proof of losses will be sought and records will need to be produced. A well structured DR plan will include the ability to retrieve relevant statistics on calls missed and any affect on the handling of calls during the outage.