Computer and
Electronic Equipment Insurance Policy (ITSC)

TABLE OF CONTENTS I. Executive summary p.2 II. Policy benefit and depreciation p.3-4 III. Premium Estimation p.5 IV. interesting findings p.6-8 1. Trend of sum insured and cloud computing 2. New risk exposure 3. Relatiopship with property all-risk policy V. Hypothetical case p.9-10

Executive Summary
Computer and Electronic Equipment Policy is an all-risk policy. It covers unforeseen and sudden physical loss or damage from any cause other than those specifically excluded. There are extended coverage in this policy to cover loss or damage due to theft, hurricane, cyclone, typhoon, earthquake, volcanic eruption and tsunami.
Under the policy of The Chinese University of Hong Kong (CUHK), it specifically covers the computers and electronic equipment which belong to the Information Technology Service Centre (ITSC). The list of computer equipment covered can be found in Appendix 2 of the policy. Examples are multimedia equipment, workstation, printers and networking equipment.
In this report, we analyze from this policy with a hypothetical case to other related finding beyond the scope of the current policy.
First and foremost, we introduce what the benefit amount should be when a covered loss or damage occurs. According to a fundamental principle in insurance, the principle of indemnity, the actual cash value is used to determine the benefit amount. Depreciation is a concept of utmost importance in the policy. The depreciation methods used in this policy are sum of years digit method and diminishing balance method. We analyzed the difference between two methods and the reason of adopting them.
In the next part, we estimate the premium paid by CUHK for this policy. CUHK would not disclose the actual amount.