“Why are insurance companies not offering a reduction in premiums to data centres that adhere to best practice?” asks David Hogg, Managing Director at 8 Solutions

December 12, 2013

The data centre market has grown significantly over the past ten years but unchecked contamination, both particulate and gaseous, continues to be a major issue in the data centre sector. Despite companies investing millions of pounds in critical IT systems, many only appreciate the risks and dangers of contamination when there is a major failure within their data centre. But, are insurance companies evaluating these risks correctly when assessing premiums for these facilities?  According to David Hogg, Managing Director at 8 Solutions, a specialist at increasing efficiency and mitigating against the risk of down-time in critical facilities, these are significant shortcomings by UK insurance companies.

David explains: “Data centre downtime can have a catastrophic impact on an organisation both in terms of impact to customers but also the negative publicity that surrounds any failure, particularly to a brand’s reputation.”

8 Solutions has completed over 100,000 projects and has a client base that encompasses the majority of the FTSE 100 either directly or through the major facilities management organisations.  He continues, “In our experience, insurance companies are focused on areas such as theft and fire, with premiums built around these perils. Insurance companies rarely have the levels of cleanliness, whether particulate or gaseous, within their horizons when evaluating a data centre and there is no assessment as to whether a data centre is being maintained and cleaned to stated best practices when deciding a rating. This is leaving insurance companies exposed as they are simply not evaluating the right levels of risk that they are accepting and there are no increases in premiums for those organisations that continue to flout best practice.  Insurance companies are also not reducing insurance premiums for data centres that are adhering to best practices and proactively reducing risks, which makes no sense.”

There are a number of standards in place for prescribed maintenance of the data centre facility. For example, ISO 14644-1 Class 6 to 8 specifies that data centres  should contain  less than 29,300 dust particles of a size of 5 microns in each cubic metre of air. 5 microns is 200 times smaller than a width of hair.  ASHRAE 20111 also confirms the ISO 14644 stance on particulate contamination, and along with the new ANSI/ISA 71.04 -2013  also specifies that levels of gaseous contamination should be within certain parameters otherwise there will be an increase in the risk of corrosion of electronic equipment.  The validity of OEM warranties is often invalidated if the hardware is not kept in an environment as laid out by ISO 14644-1, ASHRAE 2011 and ANSI/ISA 71.04

David continued, “All of these metrics can be measured, quantified, certified and a remediation plan put into place if there is a sub-standard environment.  If a data centre is operating outside of these parameters the results can be, and often are, catastrophic.

“Typically, issues that occur can include read/write errors from hardware, obstruction of cooling airflow which can lead to overheating; latency issues, for example, hardware  running slowly due to optical interference, component corrosion leading to short circuiting; and electronic circuit conductor bridging.

“8 Solutions is calling on all insurance companies to re-evaluate the way premiums are assessed. The need to evaluate risks based on a broader criteria which encompasses not only theft and fire, but also maintenance criteria is critical,” concludes David.

1  Ashrae White Paper “2011 Gaseous and Particulate Contamination Guidelines For Data Centers” written by Technical Committee (TC) 9.9 2011