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Dec 01 2005

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Why do insurers overlook the advantages of extranets?

Reading Silicon.com today, I was struck by a leader article: Insurers must account for disaster recovery, which argues that insurers fail to reward those businesses which take a responsible attitude to data back-up and security.

Apparently, when it comes to insuring businesses with multimillion-pound liabilities, insurers often pay little or no regard to where and how companies back up their data. "And given we are now in an information-based society where companies are often worth little more than the sum of their intellectual property and mission critical data, this seems a shocking oversight."

I think this is an opportunity for extranet providers, particularly those providing construction collaboration technologies to project teams. Should the offices of a project team member be devastated by a terrorist attack or natural disaster, it is likely that much of its data and paper storage systems will be severaly damaged or destroyed. However, any employees engaged on a project managed using an extranet will be able to continue to work and will – if necessary – be able to re-create a record of their inputs to and interactions with the central repository. Moreover, from an insurers’ perspective, there might be a slightly lower pay-out to cover business interuption in respect of that project.

However, the opportunity extends even when there has been no catastrophe. Project team members engaged in a typical UK construction project normally have to take out a plethora of insurances – professional indemnity insurance (PII) cover being one of the most notable. This will normally require each project team member to maintain a detailed archive of all its inputs to a project for a period of time (15 years is typical) just in case there is a future insurance claim. Traditionally, such archives involved substantial numbers of paper-based files, but the collaboration vendors are now able to offer electronic archives of all of a firm’s inputs to a project stored on a portable hard-drive storage device along with tools to help users search, access and view the data. Such archives are immediately easier to back-up and store in multiple locations. Yet I haven’t heard of any insurer offering lower premiums to project team members who take such a responsible approach to limiting their future liabilities.

Permanent link to this article: http://extranetevolution.com/2005/12/reading_silicon/

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