IT professionals tend to be analytical. They like to get the facts before they make a decision. We don't blame them. And when it comes to protecting a small IT practice, the numbers aren't always pretty. Still, knowledge is power. Check out the resources on this page to help guide your decision-making process as you consider insurance policies to protect your business.
What Type of Business Insurance Do You Need? Insurance Flowchart for Small IT Businesses
As an IT business owner, you know the stakes are high for businesses in the digital age. And while that means your IT services are more important than ever, it also means you could be liable if you fail to implement the solutions that ward off a data breach. Luckily, you're not defenseless. With the appropriate insurance products, you can protect your business and assure your clients that if something goes awry, you have the financial backing to make things right. This handy flowchart can help you quickly figure out the coverages you might need. However, every business's insurance needs are different. For an accurate assessment of the policies your IT business should consider, be sure to talk with an insureon agent.
For IT Professionals, Reputation is King
A 2013 study by ACE Group found that 92 percent of businesses consider their reputation their hardest risk to manage, and 81 percent consider reputation their most valuable asset. Maintaining a good reputation can be especially important for small businesses that rely on referrals and word-of-mouth recommendations for their clients. While we don't offer "reputation insurance," we do offer policies like General Liability and Professional Liability, which can keep you liquid in case of a lawsuit, helping to preserve your good name when bad things happen.
Non-Secure Data Presents a Huge Opportunity
In a 2014 report called State of Risk [PDF], security management firm Trustwave noted that, despite an ever-growing risk of data breaches, most businesses (63 percent) aren't adequately protecting their data. The fact that more than four out of five businesses handle some form of financial data and nearly one in five businesses has no strategy at all for controlling that data represents a major opportunity for IT professionals: as awareness of cyber threats grows, more businesses will turn to IT pros for help securing the data they handle.
Technology Insurance Costs a Fraction of a Lawsuit
The average technology-related court case costs $475,000. Even a frivolous lawsuit (one that gets dismissed before going to court) costs between $2,000 and $5,000. But buying a Business Owner's Policy (about $500) and an Errors & Omissions policy (about $858, depending on your business) costs only $1,358, which is significant less. Together, those policies protect you from the vast majority of lawsuits and protect you from damage to your business property. Considering that 90 percent of small business failures result from cash-flow problems — like spending more on lawsuits than a business brings in in revenue — it's a no-brainer to protect your business with appropriate policies.