The internet has transformed the universe into a small global village. Before the advent of the internet, businesses had no choice but to operate in physical spaces. Today, many people are running multi-million dollar businesses without a single physical office. They have employees working virtually from every corner of the globe. Likewise, consumers have also shifted their focus from visiting shopping malls and banking halls to online activities.
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The internet has had a huge impact on the business world that even those companies still operating in brick-and-mortar require an internet connection to run smoothly. In short, a huge percentage of business interactions happen online. This means that almost every business owner requires internet access to compete in the modern world. If you are running an internet business, then there’s a great opportunity for making profits. However, one major concern is the security of businesses. Internet access has also come with its share of challenges. There has been an increase in the number of cyberattacks globally – with businesses losing billions of dollars every year. This is where IT liability insurance comes in. There is a need for business owners to protect themselves against cyberattacks.
You should contact an insurance agent to help you find the right IT liability insurance for your business.
Risks faced by IT companies
- 94 percent of information technology companies face consolidation and competition
- 74 percent of IT businesses are concerned about infringement of intellectual property rights
- 94 percent of companies don’t develop and market their new products
Understanding IT Liability Insurance
Running an IT business or company comes with several risks. The fact that you are dealing with your website, email, digital assets, and social media pages make it easy to miss a few things.
Sometimes you might find yourself accessing sensitive information from another company without the necessary permission. This puts you at risk of being sued under slander, copyright, trademark, and libel laws.
The IT business’s nature has made some insurance companies reluctant to cover internet-based companies – due to liability issues.
It is important to understand that your ordinary business insurance cover won’t offer adequate protection if you are involved in a copyright infringement lawsuit.
IT liability insurance can protect you from the following risks:
- Cyber liability and hacking
- Computer viruses
- Denial of service (DOS) attacks
- Industrial espionage
- Data breach and data loss
One reason why most insurance companies find it difficult to cover web-based businesses is the lack of information regarding the risks that such businesses face.
Technology keeps improving daily. As much as it is beneficial for businesses, it also increases the amount of risk.
Because insurance companies cannot determine the exact cost based on the risks IT businesses face, they normally write exclusions within the policy to restrict their own exposure.
Benefits of IT liability insurance
It can be hard to know your business’s risks – regardless of whether you are running an IT consulting firm, an online business, or a computer repair store.
All you need to know is that starting an IT-based business, whether in an office or at home, has several risks, unlike those experienced in a storefront business.
For instance, when you start to develop a website, you face a similar legal liability with a newspaper printer.
Unfortunately, not many people realize this. To keep yourself safe, you need some form of protection. This is where IT liability insurance comes in.
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- In case the name of your business and website are the same as an already established and registered business.
- If an employee puts an image with copyrights on the homepage of your website without the owner’s permission
- When someone hacks your website and demands ransomware
- When an unsatisfied employee messes with a customer’s payment info
- When you are of using another author’s content without their consent
How should you protect your IT business?
An IT liability insurance cover can help protect your business. Besides that, there are certain things that you can also do to reduce your exposure to some of the risks.
Mitigating against such risk, stay safe, and avoid constant business interruptions. Below are some of the measures that can help:
Carry out regular security audits
You can easily discover security flaws in your system by conducting random checks and audits on your network and servers. Ask your insurance agent to recommend a reliable IT expert that can perform an exemplary job.
By reducing the risk facing your business, you also lower your insurance company’s risk, which can sometimes lead to discounts in terms of insurance premiums.
Use both off-line and cloud-based backups.
If your work’s nature is sensitive, then there’s a need to have extra data protection options. You don’t know when a hurricane might come or if someone somewhere is planning to hack and take hostage of your data. You should have an offline storage backup system – to protect yourself from such risks.
Another way you can prevent cyberattacks and security breaches is by formulating policies that encourage secure use of the system. All employees in your company should be trained on detecting phishing scams and reporting any suspicious activities.
How to find the right IT liability insurance
The priority of every business should be to protect itself against any form of risk. One way of doing this is through an IT liability insurance cover.
Although some insurance companies hesitate to insure IT-based businesses, there are several that provide tailor-made insurance covers.
However, it would help if you got the right insurance agent to help you choose the right cover. Besides, you need to cooperate with the insurance company in reducing the risks faced by your business.