Insuring your Internet Business

[Today’s guest post is by small business writer Kevin Kerridge.]

You’ve come up with a sure-fire idea for an Internet business. You’ve got your domain name. You’ve got your target customers. You’ve got your site ready to go live. You’ve got your insurance . . . right?

If you’re like most new Internet business owners, the last thing on your mind is your insurance needs. But just because you don’t have a brick-and-mortar storefront doesn’t mean you can get away without small business insurance.

As an Internet business owner, you will still need protection like any traditional business.  You still face the risk of physical damage to your business assets. Fire or severe weather can shut you down indefinitely. In addition, running an Internet business exposes you to a whole other set of risks.

Below, you’ll find a list of some of these potential cyber calamities.

Hackers

Unfortunately, no foolproof method of preventing a hacker from compromising your site exists. The higher we build our security fences, the higher hackers jump to cross them. Online businesses may get hacked and never know it happened—until it’s too late.

And sometimes we make it easy for them. A misplaced laptop with valuable customer data could spell disaster for your business. If confidential data is exposed, you could be held liable.

Computer viruses

A little piece of malicious code can cost you lost revenue, data loss, or data corruption. Your website could be down, making you unavailable to your customers. If your data is corrupted, orders might be lost. Again, if confidential data is exposed, such as credit card information, you could be held accountable.

Lost revenues

Your site goes down, for whatever reason, and so does your income from click-through advertising or lost online retail sales.

Copyright violations, defamation, and invasion of privacy

Believe it or not, with your web site come the legal liabilities of a publisher. What you put on your site can be viewed by millions, which is what you want. But any one of them could hit you with a staggering lawsuit.

For instance, what if you inadvertently used a copyrighted image without the image owner’s permission? Or what if the meta tags you use are trademark names owned by another company?

Bad advice, bad service

If you’re providing a service or advice through your business, you will want to look into error and omissions insurance. For instance, the website you built for a client doesn’t perform to the clients standards as they see them in the contract, and they want to hold you accountable. Even if the accusations are untrue, you don’t want to cover the costs of a protracted legal battle.

From an insurance perspective, the Internet is still young and evolving. Because the Internet hasn’t been around for many years and because it is constantly evolving and moving into new areas, actuarial data on the potential types of losses for Internet businesses has been hard to quantify. Insurance companies rely on this actuarial data to determine the premiums they charge.

As an owner of an Internet company, you will want to shop around and make sure you are getting the coverage you need at a competitive rate.