What insurance do I need for my online business?
Online businesses come in all shapes and sizes. From businesses that have their whole public face online such as technology platforms or e-commerce sites, to businesses that deliver part of their service online through webinars or online customer portals. In fact all businesses today rely on internet connectivity for some part of their business, whether internally or externally.
Risk Advantages of Online Businesses
For businesses that primarily deliver their services online there are some clear areas where the business has already de-risked. For example, no shopfront means no tripping customers. Or if you are a drop-shipper, no warehouse means no requirement to cover theft or vandalism on your premises. For those that deliver training online, there is now no requirement for your trainers to travel, so risks to your fleet of cars or your employees while they are on the road are removed from the business.
However there are new areas of risk to consider for businesses that are active online.
Cyber Insurance and Risks in Online Businesses
Any business that conducts some or all of its business activities online is susceptible to cyber risk. From hacking, to data breach and identity theft, ransomware and viruses. Just being connected to the internet puts a business at risk. Businesses that deal with sensitive customer information are particularly vulnerable. This includes educational institutions, banks, retailers, financial institutions, legal services and health care.
How much will a cyber attack cost my business?
Some of the costs that may arise due to a cyber incident include:
- Loss of income/revenue due to suspended trading
- Legal and defence costs or fines
- Identity theft response costs
- Virus extraction costs
- Data restoration costs
- Public relations costs
These types of risks and costs are typically covered by a cyber insurance policy, depending on its inclusions.
Not all cyber insurance policies are the same, and not all will cover the unique risks to your specific online business, which is where the expertise of an insurance broker will help. This is where the service of an insurance broker who has experience with online businesses will be the difference between adequately covering your business in the event of a significant cyber incident or failing to cover your business, with serious consequences.
Beyond Cyber Insurance
A business that delivers its services online still has many of the same risks and insurance requirements as a traditional business. So what other insurances should an online business consider, beyond cyber insurance?
This depends heavily on your business activities. An online retailer, for example, may also need to consider insurances such as public and product liability, goods in transit insurance and insurance for their warehousing and associated risks such as commercial property insurance. An online educator may need to consider professional indemnity insurance and property insurance for the equipment they need to be able to teach remotely. A large corporation that has extensive staff, but delivers their product online will still need to consider workers compensation to cover their workforce and property insurance to cover their assets.
An insurance broker will be able to bring together a suite of insurances or recommend a business pack offering depending on the unique requirements of your business. Your insurance broker should also be able to help you identify areas of risk in your business that make sense to address proactively. Whether that’s security software, hardware considerations or looking at your suppliers and understanding which pose a high risk to your business in the case of a cyber incident on their business.
So what insurance does an online business need?
Online businesses will need to carefully consider the mix of insurances that is right for them. From cyber insurance to public and product liability and workers compensation. An insurance broker with experience dealing with online businesses is best placed to provide you with tailored advice to ensure that your online business is covered for its key risks.