Cyber Liability for Solo Entrepreneur Tech Companies

Technology has infiltrated virtually every aspect of our lives, so it’s no wonder tech companies are booming. For entrepreneurs this a great opportunity to start a business, however, it can be tough breaking into a competitive market, not to mention it’s also risky.

Starting any business comes with challenges, but working specifically in tech means dealing with cyber liability. Today, businesses of every size are increasingly the target of cybercriminals looking to steal valuable personal information. This is where commercial insurance comes in.

As an individual or micro-entrepreneur, you may believe that just because it is you doing the work you don’t need insurance. This could not be further from the truth. Regardless of whether you have 100 employees or it is just you, the risks that companies face when it comes to lawsuits and claims are the same. Maybe the chance is a little less as an individual entrepreneur but the same risks are still present. An individual entrepreneur needs to have insurance protection for a vast array of problems that could arise.

• Bodily injury and property damage – If you have an office that clients visit you have a risk of them being injured and then suing you for the medical expenses and anything else a lawyer decides you should pay for. Or, if you visit clients at their place of business you could damage their property. An example of a tech company is damaging a computer owned by your customer. Depending on the type of customer base you work with, a damaged computer could cost a pretty penny. If you have the proper insurance in place, you won’t have to pay for this out of your pocket.
• Errors & Omissions – Because you are providing a professional service and you are human; errors can sometimes be made. When this happens sometimes clients can claim negligence and sue you. If you are designing a website for a customer and are completing some coding and miss one line of code or one letter and don’t discover the error until after launch, you could find yourself at the defendant's table.

Some other things to think about are if you use your vehicle to get from job site to job site you will need to have insurance for that, and if you have any special equipment you use, you will certainly want to ensure that as well.

Being an individual entrepreneur in the tech industry you probably understand already the need for Cyber Liability insurance. When hackers appear, viruses attack our computers, or a data breach happens then there needs to be a way to remedy it and Cyber Liability insurance can take care of it. For tech companies, it is even more important because you are dealing with your customer's technology and if you cause the breach, or you miss something that causes it, guess who is on the hook for damages? That’s right, you.

It is important to note that often you can find Cyber Liability on the same policy as Errors & Omissions insurance. The policy will cover you for your errors and omissions that you might make during your business, while also providing a limit for Cyber Liability. Some tech company policies will have Cyber Liability as a sub-limit of the E&O coverage amount while others will have its own separate limit. Make sure you know which one applies to your policy to ensure you have enough protection. While you are probably confident that you will never need it, you are human and mistakes can happen.

Is Health Insurance Coverage Enough for Entrepreneurs?

While health insurance coverage is a must for everyone and highly recommended, it is not all the insurance you will need as an entrepreneur. Health insurance, while critical if you become ill or have an accident, only covers you as the individual. It does not cover any business-related claims that might occur. Here are some other important insurance policies that every individual entrepreneur should consider.

• General Liability – Property damage and bodily injury as we mentioned above are covered under General Liability insurance. You can also find your personal and advertising injury coverage here for things like libel, slander, and defamation. The competition in the tech world is fierce and if you decide to make a comment about your competitors on social media, watch out. They could come after you and claim that you hurt their business financially, and coverage for this type of lawsuit would be found here. Also, if you enter into any contracts with other businesses to perform work for them, like subcontracting, they will more than likely require you to have this coverage anyway.
• Property – You probably have a very nice computer, and if you own or rent a place for an office as well as on other business personal property than you will need Commercial Property insurance. Property insurance will reimburse you for damages to your property caused by things like fire, wind, theft, and vandalism. You can bundle both General Liability and Property together and purchase what is called a BOP, or business owner’s policy which will help to cut down on the cost.
• Business Income – Speaking of fire, if you do operate out of an office and have a fire you probably will not be able to remain open until the building is repaired. If this happens, you may lose some income during this time. Business Income insurance, also known as Business Interruption, can reimburse you for these lost wages. Keep in mind that the loss has to be a covered peril like fire, lightning, etc. The perils will be listed in your Property insurance policy. A BOP will provide Business Income insurance as an added coverage for no extra charge.
• While not all-inclusive these insurance policies, along with the aforementioned Errors & Omissions/Cyber Liability will be a great way to make sure the basics are covered within your business. It is essential that as your business grows you review your insurance portfolio to ensure that you have enough coverage for your operations. Do this at least annually for peace of mind.

While health insurance coverage is a must for everyone and highly recommended, it is not all the insurance you will need as an entrepreneur. Health insurance, while critical if you become ill or have an accident, only covers you as the individual. It does not cover any business-related claims that might occur. Here are some other important insurance policies that every individual entrepreneur should consider.

• General Liability – Property damage and bodily injury as we mentioned above are covered under General Liability insurance. You can also find your personal and advertising injury coverage here for things like libel, slander, and defamation. The competition in the tech world is fierce and if you decide to make a comment about your competitors on social media, watch out. They could come after you and claim that you hurt their business financially, and coverage for this type of lawsuit would be found here. Also, if you enter into any contracts with other businesses to perform work for them, like subcontracting, they will more than likely require you to have this coverage anyway.
• Property – You probably have a very nice computer, and if you own or rent a place for an office as well as on other business personal property than you will need Commercial Property insurance. Property insurance will reimburse you for damages to your property caused by things like fire, wind, theft, and vandalism. You can bundle both General Liability and Property together and purchase what is called a BOP, or business owner’s policy which will help to cut down on the cost.
• Business Income – Speaking of fire, if you do operate out of an office and have a fire you probably will not be able to remain open until the building is repaired. If this happens, you may lose some income during this time. Business Income insurance, also known as Business Interruption, can reimburse you for these lost wages. Keep in mind that the loss has to be a covered peril like fire, lightning, etc. The perils will be listed in your Property insurance policy. A BOP will provide Business Income insurance as an added coverage for no extra charge.
• While not all-inclusive these insurance policies, along with the aforementioned Errors & Omissions/Cyber Liability will be a great way to make sure the basics are covered within your business. It is essential that as your business grows you review your insurance portfolio to ensure that you have enough coverage for your operations. Do this at least annually for peace of mind.

Cybersecurity is a real threat to any business that uses technology. Because you are an individual entrepreneur in the tech space, it is a good thing for you to know how to best improve cybersecurity not only for your business but for your clients’ businesses too. Here are a few tips.

• Training – Always be learning new and improved ways of making sure your security measures are up to date. As hackers and viruses are getting smarter, you have to stay ahead of them as best you can. Invest in continuing education, and this will also tell your clients that you truly care about the security of your business and theirs.
• Data and NSA – The way you store your data is critical to the security of your business. When you can, encrypt the data that you store especially customer information. Also, guard the data by having a top of the line NSA, or network security appliance. Having this as sort of a gatekeeper is a great step in preventing any cyber-attacks.
• Antivirus and Malware – Certainly you should have the best available antivirus and malware software installed on all of the machines that you use for business. Make sure you are updating the software as needed because it is important to stay up to date. It is also a good practice to have several layers of it for when you are opening files and clicking on links.
• Two-Factor Authentication – Your computer network is of utmost importance and you are the only one that should be able to access it. A great way to ensure this is the case is to enable two-factor authentication. While two-factor authentication may not be very efficient, it is an easy way to make sure that no one can get into your network. You can only make your password so strong, and even the strongest passwords can sometimes be obtained.
• Backup – As always, backup your data. While it might not be able to prevent a cyber-attack, it certainly makes it easier to get your data back quickly. If you end up being the victim of ransomware and had your data backed up the night before, it will not be as big of a threat since the only data lost will be anything you did that day if you aren’t able to pay the ransom. The good news is most Cyber Liability insurance policies have coverage for ransomware. Just another great reason to make sure you have the proper insurance protection in place.