Keeping Your Business Safe As You Digitize It
More Canadian business owners embrace “brick-and-mortar PLUS digital” allowing them to deliver a more attractive shopping experience, offering convenience, options and personalization online.
But with such advances also come unknown risks (ie. cyber attacks) that their traditional business insurance policy may not cover.
Many business owners assume that their online service providers (e.g., Shopify, PayPal) hold the responsibility for insurance, but this is not the case.
Many of these risks call for Cyber Liability Insurance coverage.
Listed below are a few examples of business activities that would require you to re-think your traditional insurance policy:
1. “Selling goods outside of Canada”
In a brick-and-mortar environment, you are likely only serving local customers. In an online world, your customers could be anywhere in the world. Many insurance policies restrict your insurance coverage to Canadian sales, leaving you exposed to external lawsuits.
2. “Holding custommer information digitally”
As you offer more products and serves online, you will naturally have more information about your customers stored digitally. This information could be names, contact information and products purchased. If you have this information stored on your computer and it somehow gets leaked (e.g., accidentally emailing it out, your computer getting hacked), you could be held responsible.
3. “Growing your business beyond your current insurance limits”
Part of the reason you may offer services online is to drive growth. Most policies assume a certain dollar revenue for your business, and you should be updating your policy as you grow. In addition, as you grow the business online, you should make sure your insurance (e.g., Business Interruption Insurance) covers both your online and your offline business.
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4. “Holding less inventory or different inventory items”
As your business mix shifts, you may hold less inventory in-store, or you may be holding inventory in a different place. As a result, you need to make sure that your insurance policy accounts for this. For example, if you hold less inventory in-store, you could adjust your policy and save a few dollars.
5. “Posting articles and curating online comments”
As a business owner, you could be accused (rightly or wrongly) for copyright infringement, slander or libel based on what you write or say. As you digitize, you will naturally have more content posted online that could get you into trouble. You have to make sure your insurance policy protects you against such exposure.
These are just a few examples of risks that you may face as you grow your online presence. You should work with a licensed insurance brokerage/agency to make sure you protect yourself.
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