What You Should Know about Internet Liability Insurance
You've investing money and numerous development hours into establishing your web-based or eCommerce business, but have you incorporated eCommerce and Internet liability insurance into your business plan?
If you are starting a new business, particularly an Internet startup, you're aware of the perils of doing business online, including the potential for hackers to steal financial and personal data of your customers. But you may not be familiar with the invaluable protection Internet and eCommerce liability insurance provides, which could not only save your business after a hacker attack, but helps to cover the associated costs of website-related losses.
General business liability insurance provides the traditional levels of protection, such as the costs to repair property damaged caused by your company or employee, and liability coverage for lawsuit claims.
Internet Liability Insurance Coverage
What is internet liability?
An Internet insurance policy provides companies with specific coverage for legal liability as a result of online crimes, including unauthorized access of customer information, and website, network, or server interruptions. Examples of such coverages are:
1. Server and Database Attacks
On average it takes a hacker less than 10 seconds to hack into and out of a database. As the typical database has more than 15,000 to 20,000 connections per second, it's difficult for IT or database administrators to be aware of every database attack as it's happening. Thus, the damage hackers cause, including the stealing and selling of credit card and social security numbers, is discovered when it's too late. Personal information belonging to your business or your customer is already compromised.
eCommerce liability coverage will come into action at this point to cover lawsuit costs filed by customers and to pay for their identity theft monitoring service. It also pays for the misappropriation of funds that have been redirected by hackers.
2. Viruses and Phishing
Viruses have been known to take down an entire network, even with a firewall installed. Many incidents are caused by an employee who spread the virus after they open a malicious email or visit a website.
3. Denial of Service Attacks
If your web host provider is attacked, or your server or network crashes for an extended amount of time, this not only stops your company's operation, it can interfere with your customer's ability to buy your product online or may interfere with their ability to do business.
eCommerce and Internet liability insurance covers lost income and extra expenses due to a system or website crash, along with related costs to recover lost data, repair a system or software, whether it was caused by an employee or third party.
4. Copyright Infringement and Intellectual Property Theft
According to the Center for Strategic and International Studies's (CSIS) Commission on Cybersecurity, the theft of intellectual property from U.S. companies is occurring at a rate of $200 billion a year.
Some web-based business insurance policies include a provision to cover your company's development costs for both loss and damage, so it's smart to ask your business insurance agent about protecting you eCommerce entity against this type of threat.
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