Helping Brokers Differentiate

Helping Brokers Differentiate

How online backup can help brokers differentiate themselves by adding value for business clients

Business data is both valuable and at risk

In the midst of recession, data is more valuable for businesses than ever. No company can afford to put activity on hold in the event of customer data being lost due to hardware failure or destroyed by a flood or fire. However in spite of this urgent need for business continuity, many small businesses continue to prioritise managing costs over protecting their assets and therefore don’t think about putting adequate data backup systems in place.

In fact, do the majority of SMEs even fully recognise that their data is a business asset? Try to picture an office operating without Outlook, proposal documents, HR, accounts and payroll for just one day. Everything would grind to a halt. The daily pressures of running a small business and keeping a company afloat often means that such considerations are put by the wayside; until, that is, the day when disaster strikes.

Protecting data is becoming mandatory for business continuity cover

Many business insurance policies now contain continuity clauses to reflect the critical nature of commercial data and to ensure companies are covered for any liability arising from its loss. Over and above the damage to reputation and loss of earnings caused by a business shutdown, a company might need to rent alternative premises, replace hardware systems and reproduce lost data – a costly and lengthy set of processes for which the business will need to be compensated in order to survive. 

The broker can provide risk mitigation advice

Businesses are usually required to implement a daily off-site backup service in order to validate this data continuity clause within an insurance policy. The challenge is that it’s unlikely the average SME owner will really know where to turn to find the best solution. This is where the insurance broker, as a consultative professional, can step in and offer the client some tailored advice.

If the business already has a backup system in place, it’s likely to be a service that allows the company to hand over the reins to an IT supplier without questioning first what the supplier will do with the data, how it will be stored and whether it will be retrievable when it is needed the most. If the client hasn’t already implemented a system, they will most certainly benefit from guidance as to the solution most appropriate for their needs. In both cases, brokers can take advantage of the opportunity to add value to the insurance products they are selling by forming partnerships with technology suppliers. This can help them to get a better understanding of what is available on the market and be in a position to guide their clients towards the best solution. By encouraging clients to evaluate the volume of critical data they deal with, and what they are obliged to keep from a compliance perspective, brokers can help to form a clearer picture of the likely costs of off-site data backup depending upon the individual company’s needs. Understanding the true value of data backup to a client company will also enable the broker to incentivise the client by offering an extension to the cover provided by the existing policy, giving them the ability to potentially offset the additional cost of the service.

The correct data protection solution can reduce the likelihood of costly claims

Ensuring that clients have the appropriate data safeguards in place helps to reduce the likelihood that the data protection clause will need to be invoked, which is always an important consideration. With their data properly protected by an off-site backup solution, companies are less likely to suffer any liability from a business-related disaster and therefore unlikely to need to claim on their insurance policy, giving both insurer and client additional peace-of-mind. 

Online backup is a type of insurance policy, so partnering could provide synergies

A partnership with a technology supplier also helps brokers to add value to services they sell to clients and by doing do, differentiate their offering in an increasingly pressured and competitive marketplace. The client not only benefits from an insurance policy to protect one of its most valuable assets, but also a service that supports and underpins that policy and ensures that the business is fully safeguarded against any degree of data loss.

 As SMEs dealing with vital customer data, brokers themselves need to consider how technology can best help them manage their own business continuity needs. Certainly the most effective way to sell a product to a customer is via your own experience as a client, so undertaking their own evaluation of data backup requirements could be the best first step for insurance brokers to find that perfect technology partner.

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