As an Online Business, What Liability Insurance Coverages Will I Need?

Essential Liability Insurance Policies For The Online Business Owner

It would be hard for anyone to deny the fact that the Internet has completely changed the way a lot of companies are doing business these days. Heck, some companies have gone from operating in brick and mortar stores to only operating online. Some operate both. Whatever the situation, there is simply no getting around the fact that online retail and e-commerce is exploding in popularity. This is especially true now that COVID is out there looming over everyone’s head. With more and more people afraid to leave their homes, online retail is becoming more pertinent than ever.

Despite what you might think, online business owners face a number of risks on a daily basis. Risks that could lead to the financial ruin of your company and family. Luckily, there are things that you can do to safeguard against these risks. And, one of those things is investing in broad IT insurance policies. The real trick is learning these risks and how the right policies can help as well as what policies you need. That’s exactly what you are going to learn here! While insurance policies can protect you against a lot of risks, they will unfortunately not protect you from everything, but they are an excellent place to start mitigating the risks.

 

Understanding Liability Insurance

Whether you’re just starting your online business or you’ve been operating for years, you’ve likely heard of business liability insurance. Maybe you heard about it from a homeowner’s policy. Maybe you heard about it when you bought your car. Whatever the situation, you’ve likely heard of liability insurance. Of course, this doesn’t mean that you know everything there is to know about the coverage. Liability insurance, also sometimes referred to as third-party insurance, is one that protects the insured from risks of liabilities. Liabilities like lawsuits, injuries, damages, or any financial loss for that matter.

Online business liability insurance is a policy that will not only cover legal expenses if your business is sued, but it’ll cover medical expenses as well as repair costs. It’ll also cover whether you not you are found liable, which is one of the most important things because you’d be surprised at just how many people make frivolous claims.

 

When Your Online Canadian Business Needs Liability Insurance

Any time anyone starts an online business and starts offering IT services, they are going to open themselves up to specific risks. Risks that might inevitably lead to lawsuits. Just because you operate out of your home doesn’t mean that you are risk-free. In fact, these types of online businesses are still exposed to a multitude of risks. This is exactly where liability insurance offers the reprieve you’re seeking. Liability insurance will come in handy any time there are:

  • Client visits or consultations
  • Damage to clients property
  • Professional errors and oversight
  • Undelivered services
  • Missed deadlines
  • Claims of negligence
  • Data breaches

 

Know The Types Of Liability Insurance Available To Online Businesses

Business insurance is no doubt confusing. And, part of the reason that it is confusing is that there are so many different policies available. All the different policies that safeguard against different situations can make it harder than ever to know which coverage you need. It also makes it hard to keep you with what plans offer what type of protection. Needless to say, things can get a bit murky when it comes to liability insurance.

Couple this with the fact that each IT business is different, and it makes things even more confusing. For instance, some larger businesses might be exposed to risks that smaller businesses are exposed to. Despite this, there are specific risks that every type of IT business will face on a daily basis. This is why online IT businesses from far and wide will want to consider the following policies at a minimum.

 

The General Liability Policy

Just because you are an online business, it doesn’t mean that you aren’t at risk of injuring people or people’s property. You might not ever come face to face with a customer, but it is likely that you’ll have mailmen or other servicemen at your home. Just imagine if you have a courier picking up a package and he slips and falls down your stairs. Whether there is ice, sleet, or the stairs are in perfect condition, you can be sued for the incident. This is where general liability insurance comes into play. Maybe you ship out a product to a customer and it injuries them or their property.

Whether the claim is founded or not, this is another situation that can eventually result in a lawsuit. Maybe you advertise your company online by saying that you are the best. If another company claims that this statement caused them to lose money financially, they can claim slander, which will also result in a lawsuit. Sounds kind of crazy, right? Do some research and you’d be shocked to learn just how often these things actually happen.

General liability insurance offers the protection you need in these situations. It’ll not only cover the medical expenses and repair costs of the incident, but it’ll cover the court-related costs as well.

 

The Errors And Omissions Insurance Policy

Regardless of how good you are at your job or how long you’ve been doing it, there is always the potential for oversight. Heck, all it takes is a customer claiming that there is an oversight. There doesn’t even have to be an actual oversight to have the situation to lead to a lawsuit. A lawsuit that could end up crippling your company. Whatever the situation is, this is where the error and omissions insurance policy offers the protection that you need.

This policy will protect you whether or not there is a case of oversight. If there is, it’ll pay for the financial losses your customer faces as well as the court-related costs. If the claim is unfounded, it’ll still offer the financial protection needed. This policy will also protect you in the event that you miss a deadline or don’t deliver the services that you promised.

 

The Cyber Liability Insurance Policy

As an online IT specialist, it is likely that you already know about the increasing rise of online threats. Hackers and scammers from all over the world are becoming more and more sophisticated with tactics that are more undetectable than ever before. Heck, you can visit the wrong web page these days and click on the wrong link and end up with malware. Malware that might lead to data breaches. If someone gets a hold of your customer’s information via your computer and manipulates it, you could be sued!

If you are working on a top-secret project for a customer and that data is breached, you could end up sued. Cyber liability insurance helps in these specific situations. It’ll not only pay the costs associated with the breaches, but it’ll cover any related legal fees. Online tech firms oftentimes have the option of bundling errors and omissions insurance with cyber liability insurance, which can lower your overall costs while offering even more protection.

 

Getting Quotes And Comparing Policies

Unfortunately, these are not all the risks that you’ll face as an online IT business. However, these are some of the most common. Regardless of the situation, you’ll want to get multiple quotes from providers that are familiar with the industry. Companies that are familiar with the industry will help you build specific packages to protect you, your business, and your employees against all the potential risks that you face. Getting multiple quotes while comparing policies will help ensure that you get the utmost protection at the cheapest rates possible.

Just remember that the cheapest options aren’t always the best. In fact, you have to consider the fact that they are cheaper in the first place. There must be a reason they are cheaper. It could be because they don’t offer adequate protection. Always make sure you know the providers you are working with and what they are offering.

 

 

 

 

 

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Helpful resources for IT professionals and their companies

 

Other types of IT Businesses we insure:

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