The costs entailed in operating a proper backup system or paying a professional backup
company are meager compared to what you get in return. Every incident of loss of
information without proper backup and all lost information cause actual damage that far
exceeds the costs of backup.
Many managers and business owners confuse the meaning of backing up information and
loss of information insurance. I have often found myself sitting opposite a customer, a
manager in an organization and explaining why they really need to back up the
organizational information on a daily basis and also take out a loss of information policy for
the business, which offers a completely different solution.
Backing up business information is an extremely important process that offers a solution to
most types of information loss incidents. The costs entailed in operating a proper backup
system or paying a professional company to perform the backup are meager compared to
what you get in return. Any loss of information without any proper backup leads to actual
damage that far exceeds the costs of backup. It is enough for one important file to get erased
– it probably took days to prepare the report and the direct damage to the organization is in
the valuable work hours of retyping or rewriting the lost report. This negligible and minor
instance might cause the organization far more than the cost of backing up that information.
I am not an insurance agent or insurance consultant, but I know that loss of information
insurance policies offer a solution to cases when important information is lost. The insurance
company will cover the costs of restoring or retyping the information according to the terms
of the policy. Nonetheless, you will not be compensated for information lost forever that
cannot be restored or retyped.
It is extremely important to note that in order to comply with the terms of the insurance
policy, the insurance company demands that the business apply proper and current daily
backup in order to limit the risks of losing the information. The insurance company’s
requirements are legitimate, yet in practice many businesses and organizations do not adhere
to the terms of the policy and in the moment of truth, the insurance company will check these
facts and not pay damages for restoring the information.
I once met an experienced insurance agent that said something very wise to me: “an
insurance policy is a paper that you need to be organized and have peace of mind. Backup is
what will save you in the actual moment of information loss. No insurance policy will get
you back the information you lost …” Therefore, we conclude that the organization manager
or computerization manager must ensure they have proper backup on a daily basis, which
guarantees that the vital business information is stored in an additional safe location outside
I recommend that all managers check the issue of backup and whether the information they
produce and work on in their organization is backed up and not at risk. I also recommend
consulting with an insurance agent or insurance consultant regarding a loss of information
insurance policy for your organization.
In conclusion, clearly information backup is not insurance and insurance is not backup. One
needs to understand the solution that each one offers an organization and use them correctly.