Who will Survive’ Understanding and Mitigating Computer Data

May 19, 2003

With the ever-increasing use and reliance on technology in the business world, the information stored on computers has become essential to the survival of most businesses.

Having said that, a company with a computer outage for more than 10 days most likely will never recover financially and roughly 50 percent of them will go out of business in less than five years. Companies are using computers for accounting, customer information, inventory management, process control, and much more. In fact, roughly 80 percent of the documents currently in existence are electronic documents.

Impact of a data loss
It is easy to see that when a data loss occurs either because of damage to computers or when the information is not accessible, it can mean the end of the business.

Computer systems can lose data from a number of perils including lightning, power surge, fire, flood, hackers, computer viruses, vandalism, employee error, component failure, and the list continues. When that data is lost, claimants are looking to have the insurance company pay to have it recovered or to be compensated to recreate it from scratch.

Imagine your company lost all access to electronic documents and communications without warning. Instantly you had no financial records, no customer information, no saved documents, and no email. You have nothing but the papers on your desk and in your file cabinet, assuming that you have not gone to a paperless office. How long could your company survive this situation and what would it take for you to recover? Before answering that question, you first need to know what the loss entails.

What is a data loss?
“Data” – Data is simply a combination of “1s” and “0s” stored in a specific pattern on some form of electromagnetic material. While the most common storage devices is a computer hard disk drive, storage devices can also includes tapes, floppy disks, CDs, and other forms of storage from the memory in your digital camera or PDA right down to the magnetic stripe on the back of your ATM card. “Loss” – we all know what it means to be lost. Therefore, a “data loss” is when the computer has lost the data it has stored because it cannot read or interpret the “1s” and “0s” stored on the drive.

An example would be a company who awoke one morning only to find their server flashing “invalid system drive.” All of the data on their hard disk drive had been erased. The insurance company wanted to know why the data had been erased and whether the data could be recovered. At this point, you do not know what happened, why it happened, or what is going to happen next. But you do know you have a data loss.

What does this mean to you?
What many people do not realize is that getting the system up and running again is only half the battle. Without their data, they still just have an empty computer. They do not know who owes them money, whom they owe money to, what parts to order, or for that matter whom they order them from.

As an example, a manufacturing company in the Midwest had a computer failure on a single computer in the main office.

Unfortunately, this computer belonged to the founder of the company, who was still the primary designer for their products. The computer was up and running again by the end of the day, but the designs for the entire product line that they were to manufacture for the coming quarter were lost. After weeks of searching for back-ups or hard copies many of the designs were found or recreated, but by then many of their customers had canceled the orders and took their business to alternate facilities.

Was this a data loss? Yes. Could data recovery help? We will never know because the company did not survive the loss of business.

The good news is that just because a computer is damaged does not mean that the data is permanently lost. This is important because the value of lost data can often eclipse the value of the actual property involved in a loss.

Why is data recovery helpful?
Data recovery can get the business back into operation faster and can often restore information that otherwise would be irretrievable. This can reduce the cost of business interruption, extra expense, and in the case of specialized equipment or software, can even reduce the cost of the property loss itself. Also with the application of computer forensic services, it can bring to light details to document the extra expense and business income loss being claimed.

Being prepared to prevent disaster
Prepare! Prepare yourself by knowing whom you can send the equipment to before a loss occurs.

Prepare your claimant that you are going to want to have data recovery attempted. Prepare the equipment by taking steps to secure the computer(s) and to keep the data from further corruption. By being prepared, you can make your client happy by getting their business up and running faster, and with fewer complications.

Plus, since data recovery is faster and much more cost effective than data reconstruction and reentry, you can ensure that your client’s business not only survives the loss, but does it faster and avoids limits for data coverage or costly business interruption claims.

The first step in being prepared is to already be familiar with a data recovery firm.

Know what types of situations they are capable of handling and what type of costs you are likely to incur. Most firms charge an examination fee ranging from $100 to $500. For this charge they should examine the equipment, give you some idea of what failed, estimate the likelihood that recovery will be successful, and provide you with an estimate for the recovery attempt. A data recovery firm that is able to examine the computer itself, as well as any drives, and is equipped with a clean room or clean booth is generally preferred.

There are some easy steps to ensure that the claimant and the equipment are prepared to best facilitate successful data recovery.

Let your claimant know that you are investigating the possibility of data recovery, why this is to their benefit, and ask them to assist you in reviewing the equipment in the system.

The first thing to do is identify all computers. Just because the system has a main computer does not mean it is the only place valuable information might be stored.

Next, attempt to determine if there are any intact copies of the data. This may be in the form of tape or other backup methods and may be offsite. Once that is done, determine what computers contain critical data. If it is determined that there is no chance a particular computer contains valuable information, it can most likely be treated as any other piece of property in the loss.

The computers that contain critical data need to be treated differently in order to maximize the possibility of recovery. The first and most important thing to remember is DO NOT turn on a computer that is suspected of having sustained damage. Qualified personnel must remove the hard drives in the computer.

At this point, you should contact the data recovery firm you intend to use and ask their assistance in how to proceed to best ensure the integrity of the data. If qualified personnel are not available to remove the hard disk drives or to assist, the entire computer can be packaged and shipped to a qualified firm for analysis. A company that has the ability to test the equipment, as well as perform data recovery, may also be able to offer an analysis of the computer itself for causation and repairability.

It cannot be stressed enough that to have the greatest chance of success, the drives must be analyzed by a qualified data recovery firm.

Many well-intending (and some not so well-intending) claimants, “part-time” computer technicians, as well as some genuine computer technicians have inadvertently damaged drives beyond the point of data recovery. This often happens because they did not have the proper understanding of hard disk drives, the proper hardware, or the proper analysis tools to recover the data from the drive.

Unfortunately, once the drive is damaged beyond the point of data recovery, all of the information is lost. To save your insured and yourself endless aggravation, have qualified personnel at a reputable data recovery firm analyze the drive first.

While data recovery is not always possible, by following these guidelines you can make sure your client survives by having a greater chance of successful data recovery and returning their business to a pre-loss condition faster and more cost effectively.

Brad Davis has a degree in Electrical Engineering and is a Technical Supervisor with LWG Consulting (www.lwgconsulting.com). He has been consulting on electronic and electromechanical losses for the insurance and legal industries for nearly 10 years. Currently, Davis is the head of LWG’s Data Recovery Services. i>

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