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Hurricane Sandy May Cost East Coast Businesses Millions in Lost Data

One of the hidden costs of natural disasters is a loss of critical business data due to flooding and hardware failure

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Insurance giant AIG recently estimated that claims related to Hurricane Sandy will result in payouts of over $1.3 billion, and other insurance companies have reported similarly massive costs. However, these estimates take only the material costs of natural disasters. Many business insurance policies do not offer coverage for lost data, and as a result, East Coast businesses will suffer millions or even billions of dollars in lost revenue in the storm's wake.

Businesses often have trouble estimating the financial ramifications of data loss. There is certainly a subjective element to system damage, as one business may apply much more value to its databases and email archives. However, we do know that the cost of data loss is rising. Conservative estimates place the annual cost of data recovery and rebuilding in the hundreds of millions in the United States alone.

Major disasters certainly add to these costs. While many East Coast businesses prepared for the storm, most did not anticipate widespread flooding, fires and power outages. Businesses and government institutions lost data due to water damage, but also due to corruption, electrical issues and RAID failures.

What Businesses Can Do to Prevent Data Loss

Natural disasters like Hurricane Sandy show the importance of regular offsite backups. Many of the businesses affected by the storm had expensive backup systems in place, but when a storm damages both the backups and the original copies of data, these businesses still face serious losses. Offsite backups help to mitigate this risk.

However, offsite backup services and data centers also reported damage and flooding in the weeks following Sandy's landfall. Datagram, one of the largest data centers on the East Coast, reported damage but no data loss thanks to extensive backup systems.

All businesses should keep at least three copies of mission-critical data in order to avoid losses due to natural disasters. Relying on a single redundant device or a single offsite system significantly increases the chances of downtime and financial losses.

What to Do if Your Media is Damaged by Hurricane Sandy

Businesses can improve their chances of a successful data recovery by taking immediate action.

If you need to recover data from a hard drive, RAID system or other device that was damaged by Hurricane Sandy, we recommend taking the following steps as soon as you realize that you cannot access your data:

  • Do not attempt to operate physically or logically damaged devices. Wipe flood-damaged hard drives with a dry, clean towel to remove any water, but do not open hard drives. Never attempt to dry storage devices with blow driers or other electrical devices.
  • Put water-damaged and fire-damaged hard drives into clean plastic bags.
  • Immediately contact a data recovery company to set up a case. Check that the company has a Class 10 ISO 4 Certified Cleanroom and experience with flood-damaged media. Ask about evaluation procedures and make sure that the company has appropriate security certifications.

Corrosion can quickly cause permanent, irreversible hard drive damage, so we recommend seeking data recovery services within 24 hours for the best possible chances of recovery. While the chances of a successful recovery decrease substantially outside of this time frame, you should never assume that recovery is impossible. Whether you need data from a single hard drive or a large server, Secure Data Recovery Services' engineers have the knowledge and experience to give your media the best possible treatment.

We also offer discounts for government workers, schools, military members and other groups affected by Hurricane Sandy. For more information on hurricane-related data loss assistance, call our 24/7 hotline at 1-800-388-1266.

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