What IT insurance do you need?

Seat belt - take precautions just in case{{}}How much does your business depend on its IT systems? If you experienced a problem with your IT or online operations, would your company suffer greatly?

Cyber attacks, online fraud, service outages or a loss of connectivity can all seriously affect your ability to do business.

With so many organisations reliant on the internet and IT, business insurance has adapted to cover these risks. Here’s a quick look at how insurance can protect your business.

All systems down

If an interruption to your IT systems would prevent your business operating and cause you to lose money, consider financial protection to cover this scenario.

Your existing insurance may cover you for external disruption. For example, if your telephone, internet connection or power fails for more than 24 hours then you might be able to claim on your business insurance. Check your policy wording carefully, many exclude internet connections, telecommunications problems and failure of other utility services.

If in doubt, ask your insurance provider or broker for advice. You may be able to purchase extra cover if necessary.

Get insured against cyber threats

Many companies do business solely online. Without the internet, their day-to-day work would be impossible.

For all its opportunities, the internet is not without its threats. Most business insurance policies will not cover these as standard. However, you may be able to purchase additional cover to ensure you’re financially protected against online threats.

Insurers often refer to this as ‘e-risks cover’ or ‘cyber insurance’.

This cover can protect your online liabilities as well as any losses you suffer due to someone else’s actions. For example, claims could be brought against your business for infringement of intellectual property rights (including any copyright or trademark), breach of privacy or the negligent transmission of a computer virus.

It’s worth getting insurance for these items because the cost of a claim could be crippling. However, if you knowingly flout rules and regulations, it’s highly unlikely that your insurance policy would pay out.

The volume, nature and seriousness of cyber crimes are rapidly changing, so always check exactly what you’re covered for and shop around at renewal time. You might need a specialist policy if you rely heavily on online systems. Again, consult your insurance provider or broker.

Professional indemnity insurance

Professional indemnity insurance will protect you in the event of any claims of professional negligence against you. In some cases, this could include the loss of confidential data and other breaches of confidentiality.

For example, a client could sue you if you accidentally released confidential data about them onto the internet and it subsequently damaged their reputation. Professional indemnity insurance could cover you in this situation.

If you have a professional indemnity policy already, check to see exactly what it covers. Does it include online negligence?

Remember that if you handle confidential data for clients, you should take every possible step to protect this information. Your contract with your clients may require you to do specific things to protect data online – so make sure you’re aware of these.

No matter what IT insurance you take out, it will probably require you to maintain and upgrade your security software on a regular basis. Always have adequate, up-to-date security software in place. And make sure you meet all the conditions of your policy. If you don’t, it might not pay out in the event of a claim.

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