What types of data-related service providers are eligible for Downstream Data Coverage?

Downstream Data Coverage professional liability insurance is available to data destruction services, records storage, data tape storage and data transport companies that are NAID AAA Certified.

How will Downstream lower the cost of professional liability insurance to service providers?

Downstream Data Coverage has two strategies for lowering the cost of professional liability insurance to qualified service providers. 

First, by limiting the availability of the coverage to service providers that are subject to the security standards and audit regime of NAID AAA Certification, Downstream will effectively limit losses.  Controlled losses will translate into lower premiums.

Second, at some point Downstream will be converted to a “captive” insurance program owned by its policy holders.  At that point, having already established a dependable claims history, policy holders will have more control over setting the price of the coverage.

Why is Downstream Data Coverage only available to service providers that are NAID AAA Certified?

If a policy has loopholes (known as exclusions) that make the policy difficult to collect when there is a breach, it doesn’t matter who it covers.  Since Downstream Data Coverage does not have the loopholes found in many professional liability policies, it has to make sure the service providers it covers are a safe risk.

Do any data protection regulations require service providers to have professional liability insurance?

Data protection regulations do not require third party data-related service providers to maintain professional liability insurance.  It is the prerogative of the primary data custodian who contracts with the service provider to require it.