Why Restaurants Need Electronic Data Processing (EDP) Insurance | Davis Insurance Associates

Why Restaurants Need Electronic Data Processing (EDP) Insurance

By Brad Davis, CIC (October 20, 2025)
Davis Insurance Associates – Myrtle Beach, South Carolina

When most restaurant owners think about business insurance, they picture fire, theft, or liability coverage. But in today’s digital world, your most valuable assets aren’t always physical — they’re electronic. From your POS system and online ordering platform to employee schedules and supplier records, restaurants depend on technology more than ever.

That’s where Electronic Data Processing (EDP) insurance comes in. It’s a coverage many business owners have never heard of, but one that can make a huge difference after a loss.

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What Is EDP Insurance?

EDP (Electronic Data Processing) insurance is designed to protect a business’s computer systems, hardware, software, and data against losses that standard property insurance usually doesn’t cover.

IRMI (International Risk Management Institute, Inc.) also calls it Data Processing Coverage – you can read more on IRMI’s website.

A typical property policy might insure your building and contents – tables, chairs, ovens, refrigerators, but it often treats electronic equipment the same as any other piece of property.

EDP coverage can help fill that gap. It provides protection specifically for losses related to your digital equipment and data, such as:

• Accidental damage to computers or POS systems

• Power surges and electrical disturbances

• Equipment breakdowns

• Virus or malware corruption

• Data restoration and recovery costs

• Business interruption caused by system failure

In short, it’s designed for the unique risks that come with running a technology-dependent business — which describes almost every restaurant today.

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Why Restaurants in South Carolina Need EDP Coverage

If you run a restaurant in Myrtle Beach, Conway, or anywhere along the South Carolina coast, you probably already know how unpredictable business can be. Hurricanes, power outages, and equipment failures are common. But what about your digital systems?

Think about how much your restaurant relies on technology every single day:

• Your point-of-sale (POS) system processes every order and payment.

• Reservation software manages bookings and table assignments.

• Inventory programs track food costs and vendor orders.

• Payroll and employee scheduling systems keep your team on track.

• Online ordering and delivery apps bring in major revenue.

If a power surge fries your POS server or a virus corrupts your reservation database, you could lose thousands in both income and productivity — even if your building and contents are unharmed. That’s exactly the type of scenario EDP insurance is designed for.

EDP coverage can help pay to repair or replace your damaged systems, recover your data, and cover the extra expenses that come with getting back up and running.

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Real-World Example

Imagine a restaurant in Myrtle Beach that uses tablets for tableside ordering. A lightning strike during a summer thunderstorm causes a power surge, frying the router and damaging several tablets. The restaurant has standard business property coverage, but the insurer classifies the tablets as “electronic data equipment” — subject to a $2,500 limit.

If the restaurant had an EDP endorsement, it could have coverage for the full replacement cost of the tablets, network hardware, software reinstallation, and even temporary downtime.

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How to Purchase EDP Insurance

There are two main ways to obtain EDP insurance:

1. As a Stand-Alone Policy

Some insurers offer dedicated EDP or Technology Equipment policies. These typically provide broader coverage, higher limits, and protection for software and data restoration. They’re ideal for businesses that heavily rely on technology — such as restaurants with complex POS systems or online ordering platforms.

2. As an Endorsement to Another Policy

EDP coverage can also be added to a Business Owners Policy (BOP), Commercial Property Policy, or even a Cyber Liability Policy as an endorsement. This is often the most affordable and practical approach for small to mid-sized restaurants.

At Davis Insurance Associates, we regularly help restaurant owners compare both options to make sure they’re getting the right amount of coverage without paying for overlap.

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EDP vs. Cyber Liability: What’s the Difference?

It’s easy to confuse EDP coverage with Cyber Liability Insurance, but they protect different things.

• EDP insurance focuses on physical and operational losses — damaged hardware, corrupted data, or equipment breakdown.

• Cyber Liability insurance focuses on security and privacy risks — data breaches, hacked customer info, and regulatory costs.

In many cases, it makes sense to carry both. Together, they provide a more complete safety net for your restaurant’s technology infrastructure.

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The Bottom Line: Don’t Overlook EDP Coverage

Electronic Data Processing insurance is one of those coverages that restaurant owners often don’t think about – until they need it. But as technology continues to drive how restaurants operate, it’s becoming just as essential as property and liability protection.

A quick power surge, hardware failure, or virus could cost far more than you realize. EDP insurance ensures you’re protected from the digital side of business interruptions.

If you own a restaurant in South Carolina and aren’t sure whether your current insurance includes EDP coverage, our team at Davis Insurance Associates can help. We’ll review your policy, explain what’s covered (and what isn’t), and recommend options to fill the gaps – so you’re covered from your kitchen to your computer.

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Get started today: Request a restaurant insurance quote or call (843) 213-0000 to talk with one of our agents in Myrtle Beach.