It is the command every DBA has nightmares about, and last Tuesday, I actually ran it. I thought I was in the staging environment, but my terminal tab was wrong; instantly, 400,000 user records vanished from the production database of a mid-sized e-commerce client. The client is down, losing $5,000 an hour, and they are threatening to sue me for the “cost of restoration” and “lost business income” while their internal IT team frantically tries to rebuild from a cold backup.
Key Takeaways
- “Human Error” is covered: This is the textbook definition of an “Error” in Errors & Omissions (E&O). You were negligent, but it wasn’t malicious.
- Restoration Costs vs. Lawsuits: Standard E&O pays for the lawsuit if the client sues. It might not pay the data recovery firm unless you have a “Cyber Extension” or “Electronic Data Restoration” clause.
- The “Rectification” provision: Some high-end tech policies will pay you (or a vendor) to fix the mess immediately to avoid a lawsuit.
- Gross Negligence: If you bypassed standard protocols (like “no root access on prod”), the insurer might argue “Gross Negligence” to deny the claim, though this is a high bar to clear.
The “Why”: The Electronic Data Exclusion
The Trap: General Liability (GL) policies almost always contain an “Electronic Data Exclusion.”
It explicitly states: “We do not cover damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate electronic data.”
Since DROP TABLE is literally the deletion of data, a cheap General Liability policy provides zero coverage. You need Technology Errors & Omissions (Tech E&O) which specifically overrides this exclusion to cover “failure to prevent destruction of data.”
The Investigation: I Quoted 3 Major Carriers
I called three carriers specializing in IT contractors to see how they handle accidental deletion claims.
1. Coalition (The Tech Specialist)
- My Analysis: Coalition is built by hackers for hackers. Their policy is the clearest on “Operational Error.” They cover the liability arising from accidental damage to client systems. Plus, their claims team includes tech experts who can actually help with the recovery strategy, not just lawyers.
- The Cons: They scan your systems. If they find you were using unpatched DB software, they could deny you based on “failure to maintain security.”
2. The Hartford (Tech Choice)
- My Analysis: Their “FailSafe” suite is robust. It includes specific coverage for “Electronic Data Liability.” I verified with an agent that “accidental deletion by an insured” is a covered peril.
- The Cons: Higher deductible. You might pay the first $2,500 or $5,000.
3. Hiscox
- My Analysis: Good for freelancers. They cover “negligence” broadly. If the client sues you for the downtime, Hiscox defends. However, they are less likely to front the cash for a data forensics firm to recover the rows unless it’s a “Cyber” claim (malicious), not just an “Oops” claim.
[IMAGE: Screenshot of a terminal window with the catastrophic “0 rows affected” message]
Comparison Table: Data Destruction Liability
| Carrier | Covers “Accidental Deletion”? | Data Restoration Costs? | Deductible | Best For… |
| Coalition | Yes | Yes (Strong) | | DBAs / DevOps |
| Hartford | Yes | Yes (Endorsement) | | IT Consultants |
| Hiscox | Yes (Defense) | Limited | $ | Solo Freelancers |
Step-by-Step Action Plan
- Stop Touching It: Do not try to “hack” the data back if you aren’t sure. You might overwrite the sectors on the disk.
- Notify Carrier Immediately: Report a “Potential E&O Claim.”
- Hire Forensics (With Approval): Ask the adjuster if you can hire a specific data recovery firm. Get the approval in writing.
- Silence is Golden: Do not email the client saying “I am an idiot, I will pay for everything.” Say “An anomaly occurred, we are investigating restoration.” Admission of fault can void coverage.
FAQ
Is this a Cyber claim or E&O?
It is E&O because it was an error, not a hack. However, modern policies often blend the two.
Will they pay for the client’s lost sales?
Yes. That is “Third Party Financial Loss,” which is the core of Tech E&O.
What if I didn’t have a backup?
That makes it worse (negligence), but it doesn’t void the policy. Being bad at your job is insurable. Being criminal is not.