If your business promotes or markets its products or services over the Internet or online, there are unique property and liability risks. For example, you are vulnerable to major loss exposures from malicious attacks, loss of service or theft of customer information from your database.
As use of the Internet has grown, insurers have worked to develop products that address the insurance needs of businesses that engage in e-commerce. This is an area of rapid evolution in the insurance industry.
For the majority of small businesses, the most efficient and cost effective way to obtain e-commerce-related coverage is with a Business Owners Policy (BOP), preferably one that is specifically tailored to your type of business. These policies roll a number of different types of coverage into one insurance contract. Though marketed under a variety of names, the policies typically have provisions similar to the property insurance and liability insurance sections of the BOP, with the option to add various other coverage’s that you may need.
Even if you own a home-based online business and do most of your work from a home office, you will still face a multitude of risks every day. That’s where liability insurance for online businesses comes in.
Liability insurance for online business will help protect you against:
There are many kinds of liability insurance for online businesses. But at a minimum, you should consider protecting your business with the following three digital business insurance policies.
General liability insurance can protect IT business owners against third-party personal injury and property damage claims, as well as advertising injuries.
For example, if a client visits your office and is injured by slipping on a wet surface, general liability insurance would help cover medical bills and legal expenses.
For instance, if you miss a project deadline and your client suffers a financial loss as a result, this policy will help cover your legal defense costs if the client decides to sue.
Cybercrime and data breaches are increasingly huge potential threats for any small IT business. If a project you work on for a client results in customer data being stolen, you could be looking at a substantial lawsuit.
Cyber liability insurance can help pay the costs associated with a data breach, including legal fees, customer notification, credit monitoring, and public relations. Tech businesses can often bundle this policy with errors and omissions insurance in a package called tech E&O.
E-commerce creates liability risks. One is that a breach of your system may cause private information to be compromised. You can add the Electronic Data Liability Endorsement to your BOP to cover liability resulting from loss of electronic data that is caused by an “electronic data incident.”
Another is the risk that someone could accuse you of libel, slander or advertising injury because of something published on your Web site. The BOP would provide coverage to defend you and pay any damages for which you are legally liable, up to the policy limit.
Regulating Agency and References
Insurance Information Institute (III)
This organization’s mission is to improve public understanding of insurance – what it is and how it works. Visit III at https://www.iii.org.
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