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Risk Management Bulletin

Summer Electrical Surges are a Serious Risk to Business Technology

By July 1, 2015No Comments
Almost every modern business relies on expensive electronic equipment, computers and networks to maintain efficiency and day-to-day operations. While businesses take the proper precautions to secure these components from theft, they often leave them susceptible to another danger, electrical surges. Unfortunately, without the proper protection, surges can result in costly damage to a business’s physical assets.

Causes of Electrical Surges 

Electrical surges are caused by a variety of reasons, but most are the result of direct lightening strikes to a building or a nearby electrical source. In many cases, the strike occurs elsewhere on the utility system’s electrical distribution system and the surge travels into a business via the electrical lines. According to the Lightning Protection Institute, lightening strikes cause approximately $1 billion in property damage every year. Other causes of surges include accidental line crossing by utility companies or during severe weather when lines fall. They can also be caused when the electrical system is overloaded, such as in hot summer months.

Equipment That’s at Risk

Computers, servers, micro-processor-based controllers, telephone switchboards, robotics, cash register systems, and televisions are just a short list of the items that can be damaged by a surge. Basically, anything that is plugging into a wall or directly into the electrical system is at risk of damage when a surge occurs.

Physical Protection Devices

All electronic devices that plug directly into an electrical outlet should be plugged into a surge protector instead. The surge protector, also called a Transient Voltage Surge Suppressor (TVSS), is then plugged into the outlet. When electrical surges occur, the TVSS absorbs the current and stops it from flowing into the device. More advanced surge protectors must be installed on a business’s main switch board and any sub-distribution panels for larger facilities.

Insurance Protection

Of course, even the most prepared business can still suffer losses from electrical surges. That’s why business owners must ensure that all electronics and technology equipment are properly insured. Additionally, the surge protectors themselves can be costly and are also often insured under insurance policies if they fail due to an electrical surge.