Doing Business Now and Cyber Liability
By: Keith Goodwin, Capstone Brokerage Risk Manager, March 2014
The way we do business in America has changed drastically over the years. Most businesses used to consist of a store front, advertisement in the newspaper or phone book and referrals from a satisfied customer. To expand your business you would open a second location, hire more employees and grow your company in a tangible manner. That was then! In the new day and age the internet is taking over and changing the business world.
Now there are company websites, Facebook Pages, LinkedIn accounts and of course blogs replacing the yellow pages. Company reviews and recommendations are now at your fingertips on websites such as Yelp.com. For the consumer it makes life much easier.There is virtually nothing someone can’t do from home. Grocery shopping, banking, travel arrangements even scheduling a reservation and previewing the menu at a restaurant, it is all online. You can find out practically anything you want about a company in the comfort of your home. You as a consumer can do things online that simply make life easier.
For the business owner it makes things more complex, more risky, and more dangerous really. Customer satisfaction is important now, more then ever. A bad review online could make or break a business. This may sound crazy too many long-term business owners who have built their companies on word of mouth referrals. However the reality is that the new referral system people turn to is the internet.
In today’s world where the internet plays such an integral part of business, chances are your standard business liability insurance doesn’t cover all of your risks. Standard liability policies cover the basics, items such as missing equipment or your warehouse being destroyed. It is highly unlikely that a standard liability policy would cover theft or a loss of valuable company information stored on one of your servers or hard drives. Your Professional Liability isn’t going to cover your company’s website being shutdown as a result of a professional hacker. If your company uses one of the many social media outlets such as Facebook, LinkedIn, Twitter or a company blog you are at risk for a false accusation claim more than likely not covered by a common policy. In this new world there is a growing need for every company to have some form of a cyber liability policy in place.
Insurance carriers have struggled with properly covering businesses in this new cyber world. Cyber Liability covers a vast array of risks for a business owner. The problem is every unique business has unique risk. In other words, there is not a cookie cutter answer as to what policy every one needs. This makes it all the more important to maintain a relationship with your insurance broker.
As a business owner ask yourself the following questions:
1. What do I need to protect?
Example your clients personal data
2. What cost/expense do I want covered?
Example, credit monitoring for clients whose information was at risk
3. Which type of incident do I want to protect against?
Example a data breech
4. Where is my company most vulnerable?
Example a hacker accessing my company server
Every business should consider a form of cyber liability to help insure they are protected against the 3 major threats; content liability, data breech, and business interruption. For more information on these topics subscribe to Capstone’s Insight page.
