Starting a business in 2022 is practically impossible without good digital support. Whether it’s for marketing, advertising, using a sales system or management software, it is very rare to find a small business that does not carry out at least some of its transactions and communications online.

Computers, tablets, smartphones, messaging apps, delivery apps, recruiting platforms, remote workspaces and other digital and physical assets are a big part of many companies’ operations. That is, when they are not the main means of performing the intended service.

Even if that is the case, companies do not always consider securing their digital structure. It is very important to ensure that the hardware, software and data that enable your small business to function are protected.

Without specific coverage, you risk losing extremely valuable and vital tools and information.

We have selected 4 insurance policies that should be considered to keep your company’s digital operations safe and secure:

1. Business Owners Policy (BOP)

BOP is a business owner policy that incorporates multiple forms of insurance and coverage into a single package.

You can customize your BOP with different coverage options:

  1. Rubble removal
  2. Collapse
  3. Business income – Company revenue
  4. Extra Expense – Extra Expenses
  5. Construction cost increase
  6. Civil Authority
  7. Forgery and alteration
  8. Dependent property revenue
  9. Digital Data
  10. Fungal, wet rot, dry rot and bacterial damage

Coverage for Digital Data provides protection against a variety of digital risks and pays to replace or restore electronic data that has been destroyed or corrupted by a covered event.

2. Property Coverage

If your computer is not working properly or is stolen, there is no software to make your operation run as quickly and efficiently as usual.

A basic Commercial Property Insurance policy protects your company’s physical assets against fire, explosion, theft, vandalism, and even vehicle or plane damage or tragic accidents.

If a piece of equipment is damaged or stolen, you may receive compensation based on the replacement cost or actual cash value, whichever you choose when taking out insurance. This protection is in effect whether you are the owner or tenant of the insured property.

3. Cyber Liability 

Only you know how much it costs to earn the trust of your customers. Therefore, you cannot put your customer’s personal data to chance.

If a cyber attack exposes your customers’ personal data to hackers, your business will likely struggle to recover. The risk exists no matter how small your business is.

According to a survey by Nationwide, 83% of business owners allow and offer employees the option of working safely from a remote location. Among young entrepreneurs (ages 18-34), the number jumps to 95%. However, only 50% of business owners updated their remote work security policy in the past year. Nationwide noted that failure to update remote work policies can put business owners at greater risk of a data breach.

Small business owners are also exposed to other cyber threats. Only 4% of business owners have adopted the US Small Business Administration‘s security best practices and recommendations. Only 1 in 5 small business owners have offered their employees formal cybersecurity training.

Other findings from the report include:

  • 65% of business owners admit to having been victims of a cyber attack
  • 33% of reported cyber attacks were virus attacks
  • 29% of attacks were phishing
  • 86% of entrepreneurs believe digital risk will continue to grow
  • 30% of companies with 11 to 50 employees do not offer any type of formal cybersecurity training.
  • 7% of companies do not update their software
  • 35% of business owners who have never experienced a cyber attack are unaware of the financial cost of recovery

Cyber Liability Insurance not only protects your electronic data and computer systems from cyber attacks, but also your customers’ information. Data compromise coverage protects employee and customer data in the event it is hacked, stolen or exposed.

Another insurance component, Identity Recovery Protection, helps victims of identity theft to recover from the breach of their personal data. It reimburses expenses, including lost wages and attorney fees.

4. Equipment Breakdown Insurance or Data Processing Coverage 

This is insurance in case of equipment failure (boilers and machines) or to cover the processing of your data. Depending on which equipment is damaged, your business may have to stop.

If you are unable to ship orders, communicate with your customers or access important data, your operations could be impeded or at the very least, delayed. A power surge can put your computer network out of order or an electrical system can short out, forcing your business to stop until you can restore power.

Equipment Breakdown Insurance helps you recover from hardware-related outages to return to your normal business operations, reimbursing you for the time and labor involved in replacing or repairing damaged equipment.

It will also cover lost revenue and other expenses incurred in putting your business on hold.

Join our community!

If you’ve noticed that your business may be better protected, or that you urgently need to protect your digital operations, speak to a Breezy Seguros agent.

We are ready to guide you in the best way possible and to help you find coverage for your network that fits your situation and your budget.