Server Crash: 100.000 Euros Compensation Claim After Data Loss
From the small error message to profound system problems: IT experts bear great responsibility for their clients' hardware and software. In this real damage event, however, things went to the extreme and all systems stopped working due to a chain of extremely unfortunate circumstances. This demanded all the expertise of an IT service provider insured through exali...
From The Error Message To The Server Crash
Dealing with small error messages is part of the daily business of IT service providers. For an IT specialist insured through exali, who was responsible for the entire IT infrastructure of a company with his full-service offer, the day also began with an error message in the system of his customer. The IT service provider then routinely restarted some services - the problem seemed to be solved.
However, a few subsequent tests painted a different picture: it turned out that the problem was much more extensive than the initially suspected application error. Therefore, the IT specialist immediately went to the server centre with his team to find the error.
The fact that even supposedly routine work can lead to disaster is also shown in the article Data Loss After Security Update – a Real exali Damage Event.
Server Crash Due To Fatal Chain Reaction
It was high time for this measure, because in the meantime more and more faulty processes were occurring in connection with the server. After an intensive search, the IT service provider finally found the cause of the problem: a defect in the server's storage disks had disturbed the data duplication, so that the files could no longer be read out correctly. Consequently, the team replaced the defective components and restored the existing backup - unfortunately, this also turned out to be only a temporary fix.
A few days later, it became apparent that the data backup was unusable. A whole series of different defects had caused the backup directories to be overwhelmed with data rubbish and finally completely destroyed. As if that were not enough, the replacement of the defective components had caused a short-circuit, to which the MFT (Managed File Transfer) component also fell victim. The MFT component secures the electronic data exchange in the company and is therefore of elementary importance for the functioning IT infrastructure. The correct reading of the data was once again impossible.
Complete Data Loss
After his client had been without functioning hardware and software for several days, the IT service provider came to the conclusion that further efforts were needed to solve the problem. So he handed the damaged data media over to a data recovery company in the hope that the lost files could be recovered. Instead of being rescued, however, these efforts brought about the final end, because the data rescuers made a fatal mistake in their efforts and the data records were lost for good.
The company that the IT specialist was looking after was now in a very precarious situation due to the loss of data and the lack of functioning IT systems and had suffered a not inconsiderable loss. Therefore, the obvious question arose: Who is responsible here?
Protected Even In The Worst Case
Professional Indemnity Insurance through exali protects freelance IT experts from the financial consequences of professional negligence - even in the event of system errors or the complete loss of data. In the event of a damage event, the insurer checks the claims made against you to ensure they are correct, settles justified claims and fends off unjustified claims on your behalf. This allows you to concentrate fully on the most important thing in your business, your customers.
100.000 Euros Claim For Compensation
Without functioning hardware and software, the company was only able to work to a limited extent and was even forced to rent a replacement infrastructure for its IT for a short time. However, the loss of all data was particularly fatal. The staff had to update the data manually as soon as the IT system was set up correctly again. The company estimated the damage at around 100.000 euros, which it is now claiming back from the IT service provider.
If you have always wanted to know what Professional Indemnity actually provides in the event of a damage event, this article will help you: What Does your Professional Indemnity Insurance Do in the Case of a Damage Event?
Fortunately, the It service provider had taken out Professional Indemnity Insurance through exali, so that he did not have to bear this high sum alone. The insurance professionals from exali carefully examined the case and then forwarded it to the insurer, who not only covered the justified claims of the damaged company, but also commissioned a second data recovery company to fully clarify the facts. The IT service provider was left with the memory of a nerve-wracking case, but thanks to the appropriate protection, the existence of his business remained secure.
Vivien Gebhardt is an online editor at exali. She creates content on topics that are of interest to self-employed people, freelancers and entrepreneurs. Her specialties are risks in e-commerce, legal topics and claims that have happened to exali insured freelancers.
She has been a freelance copywriter herself since 2021 and therefore knows from experience what the target group is concerned about.