Computer and Media Coverage under an Inland Marine Form

May 3, 2010

I am currently quoting for a client who has a Computers and Media form that reads very similar to the ISO form IH 00 75.
My client operates an off-site data storage business, meaning that he houses servers in his office and sets it up so that third parties to whom he's sold his service upload their information to him on a regular basis (e.g., every night). These third parties are not on-premises but are within an intermediate radius. Should a data error occur for these third parties, our client takes a physical copy of the most recently backed up data to their premises and restores it.

My question is this: if there is a fire at the insured's premises that destroys the systems used to house third-party data, does the IH 00 75 form provide coverage for the restoration of that third-party data that was on the insured's machine at the time of loss? If not, what are the relevant clauses that restrict coverage for such data and is there any add-back available either in the form itself or via endorsement?

Illinois Subscriber

The IH 00 75 states that covered property includes property of others that is in the insured's care, custody, or control. Covered property also includes data. From what you describe, the property sent to your client by third parties is data that is in his care, custody, and control. The value of data is the actual cost to reproduce it. There is no exclusion for fire, and direct physical loss or damage of covered property is covered, so this form would cover the type of loss you depict.  

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