This story appears in the
December 2001 issue of
Entrepreneur.
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In the alphabet soup of technology trends, ASPs are one of the
hottest. If you use one, be sure you're protected if something
goes wrong.
ASPs (application service providers) allow you to avoid buying
software and hardware and still have the latest technology by
paying a monthly fee to access applications. But what if your ASP
gets a virus, loses data or goes out of business? With the proper
insurance, you can recover those losses.
Many of today's technology policies cover losses due to ASP
issues, says Richard H. Reynolds, vice president of Morris &
Reynolds Insurance in Miami. Some ASPs offer coverage to protect
their clients. If yours says it does, Reynolds recommends asking
for a copy of the policy and having your insurance agent review it
for you.
"If the ASP doesn't offer coverage or the coverage is
insufficient, get your own policy to protect your data,"
Reynolds advises. But, he adds, insurance shouldn't be your
first defense against an ASP failure. "Have a backup plan. If
something goes wrong, you want insurance to be your last resort
because if you get to that point, you've got a big
problem." The best insurance when it comes to hiring an ASP is
to shop carefully and choose one that's stable, financially
secure and has a disaster plan in place.
Jacquelyn Lynn is a freelance business writer in Orlando,
Florida.
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