Even though an online business usually does not have a brick and mortar office, it does not mean it does not face risks. Protecting an online business requires a tailored insurance policy to meet the specific needs of your business. These are just a few things you may want to consider before you dismiss insurance.
Lawsuits Occur More Often Than You Might Think
When a business doesn’t actually see their customers it can be easy to overlook the threat of lawsuits, but a lawsuit can occur at any time and blindside your business.
For instance, in 2017 California state courts saw an unprecedented number of cases claiming online business did not meet the Americans with Disabilities Title III accessibility requirements.
Even though the courts dismissed several of the cases, it was only because the companies made some accommodations for customers such as a 24/7 toll-free telephone number on their website manned with live customer service agents. However, these decisions don’t guarantee other businesses will get off the hook or that other judges will see things in the same light.
A lawsuit against an online company is time-consuming and expensive, especially since customers are often spread out all over the country, or even the world. General liability insurance provides an affordable cushion against the costs involved in a lawsuit.
You Risk Your Professional Livelihood
If you’re in the “professional services” or consulting business, you are at great risk. Clients can sue if they believe your business was negligent or failed to perform their professional services, even if it is not true.
Business consultants that recommend changes could find themselves in a lawsuit if the client loses money, even if it wasn’t their fault. Professional liability insurance reimburses you for lawyer fees, judgments and court costs which could cripple your company or put it out of business.
It also protects marketing consultants, design professionals, and software engineers from lawsuit costs pertaining to copyright or trademark infringement.
You Rely Heavily On Your Equipment
Even if you don’t operate in an office, you rely heavily on your equipment to operate remotely. You may own a top-of-the-line computer, office equipment, and perhaps industry specific machines too.
If anything happens to your equipment, business grinds to a halt and you stop earning money. A business owner’s policy can protect your property from physical damage, and if someone injures themselves while visiting your place of business. It also protects you from claims of libel and slander.
You Rely on Third-Parties
Almost all online businesses rely on third-parties. You use an internet provider, access web-based software, and perhaps rely on suppliers and a shipping company if you supply physical goods.
If any of these third-parties experience issues, it could interrupt your business and affect your bottom line. Business interruption insurance can help you recoup your losses during a prolonged outage so you can stay afloat.
You’re More Susceptible to Hacks
You’re online more often and you’re more susceptible to hacks, especially if you operate an e-commerce business. Your company deals with sensitive customer data and stores valuable information in its database, and a data breach can have a severe financial and reputational impact on your company.
Symantec estimates the cost of a data breach to an E-commerce retailer is about $172 per record, and the frequency and variety of threats continues to increase. A security breach means lost customers and possible lawsuits if the criminal compromises a customer’s identity. Cyber liability insurance is an affordable option to protect you from these risks.
Partner with an independent insurance agency like ours to protect your online business properly. We’ll examine your risks and tailor a policy for excellent protection and affordable premiums. Remember, we work for you, not the insurance companies.