1. You haven’t made it a priority as a small business

Small business owners sometimes figure they don’t need to carry much insurance because they don’t have a lot of assets. But someone who sues you doesn’t necessarily care how much money you have. They may, unfortunately, intend to destroy you financially. And the smaller a business is, the more likely it is that an owner or manager can be held personally liable. So in a way, small businesses are at a much higher risk than big enterprises, because one lawsuit can be devastating.

Never been sued? You’re lucky. The Small Business Administration estimates that 36 to 53 percent of all businesses will be involved in litigation in any given year. For many of those, a business insurance policy will cover the costs of settlements, judgments, and legal fees. Unfortunately, some companies will discover their coverage is lacking. Here are some indicators that your business may be underinsured..

2. You’re in the business of advice

Anyone who gives advice for a living is at risk of misunderstandings, client dissatisfaction, and simple human error. Advice-giving professions are not limited to fields like counseling and financial planning. Here’s just a short list of professions that also give advice: tax preparers, home inspectors, building contractors, wedding planners, professional organizers, life coaches, sales trainers, and motivational speakers.

3. You have employee turnover

Even your most trusted employee can make a mistake that costs your company thousands of dollars. So if you have high turnover, there’s even more exposure to risk. A government study of small business lawsuits found that after a suit, business owners primarily wished they had trusted their employees less, purchased insurance, and made sure every employee was bonded.

4. You only have one kind of insurance

There are many types of business insurance. General liability and business owner’s policies (BOPs) are some of the most basic, but if that’s all you have, it can be a sign that you are not fully insured. Review other types of insurance, like: property, commercial auto, worker’s compensation, errors and omissions (E&O), directors’ and officers’ (D&O), cyber liability, employment practices, business interruption, and umbrella policies which supplement existing policies against catastrophic loss.

5.  It’s a high-risk business

It might not feel like your business falls into the typical high-risk categories, like doctors, lawyers, online gambling, and adult-oriented services. But there are dozens of other fields that come with high risk. Software developers, for example, can accidentally cause millions of dollars in lost revenue due to glitches. Sometimes there is risk simply because the business deals with highly emotional situations, as funeral directors do. Your insurance company can do a risk assessment that clarifies your situation and highlights areas that might need coverage.

6. You haven’t reviewed your policy lately

If you’ve been renewing the same policy for years, and can’t recall exactly what it covers, it’s time to take a fresh look. Tech issues have created new risks. For example, if  your employees handle credit card information, or deal with a large amount of customer data, it might be time to look into cyber liability and data breach coverage.

7. You’ve never been sued or made a claim

Although it’s counterintuitive, if you’ve never been sued or made an insurance claim, it might be an indicator that you’re underinsured. Why? Because lawsuits and disasters force companies to review and update insurance policies. One study found that 94 percent of business owners assumed they were fully covered in the event of a disaster, but just 56 percent actually were.

SEE ALSO: Why Do I Need Errors and Omissions Insurance Coverage? 

Click here to get an insurance quote and ensure your business is fully covered.

Reprinted with permission from Links Insurance

Cyber liability. It might sound futuristic, but its time has come.

To address a common misconception head on, it’s not limited to tech companies. Cyber liability coverage is a must for any business that handles sensitive client information— credit cards, customer records, and other confidential data. Nowadays, nearly every company deals with this sort of information as a part of the normal course of business.

The Basics

Cyber liability and data breach coverage provides protection against the costs your company can incur when a data security situation occurs. For example. say you run a small-town fitness center that charges cards on a monthly basis, and an employee steals customer bank account information.

You gathered this information with good intentions – to charge your customers’ monthly membership fees in a convenient way – and did your best to protect it in a secure system. But, unfortunately, an employee with some computer knowledge accessed the information and made fraudulent purchases on customer bank accounts. This is a data breach— and now you’re on the hook for the cost.

These situations often end up in court. If a judge orders your company to pay a settlement, legal fees or other court costs, cyber liability insurance can help. It was designed to save your business from a devastating financial blow.

A Bit of History

The first cyber policy was written in 1997 in response to the alarming rise of hackers, or high-tech thieves, who began targeting organizations in a systematic manner. During the late 1990s and 2000s, these insurance policies expanded as hacking expanded.

The insurance industry has updated policy coverage over the years to include many types of sophisticated data breaches. Cybercrime now costs the global economy $450 billion a year – yet 53 percent of businesses still report being ill-prepared for cyber attacks.

So is your business really at risk? Small business owners sometimes think data thieves primarily target big companies like Target – one of the famous cases we see in the headlines. However, 62 percent of cyber attacks are on small and mid-sized businesses. And of those, 60 percent of small businesses go out of business within six months due to the financial strain. Plus, small businesses rely on homegrown strategies like word of mouth and friend referrals – which are quickly tainted when a security breach occurs. Suddenly your business is the talk of the town, and not in a good way.

Risk and Planning

So the question is not so much if your business will be affected by a data breach, but when – and what you can do about it. Security experts say the best way to prepare for cyber attacks, and minimize their impact, is to put a plan in place ahead of time. Train employees how to handle sensitive data and train them how to respond if a data breach is suspected. Make sure everyone in your organization knows the plan from the first moment they handle customer information.

Having cyber liability insurance also creates a plan. If the worst case scenario happens, insurance helps you quickly defray the cost of a data breach and move on to restore confidence in your company.

Click here to get a quote and ensure you’re fully covered for cyber attacks.

Original post printed with permission from Links Insurance blog

Umbrella policies help cover your business for catastrophic losses, providing protection above your primary commercial-insurance policies. With the rising medical and legal costs associated with accidents, third-party lawsuits, and other severe loss exposures, it’s important to start a conversation with your independent insurance agent about umbrella coverage–and soon.

But not sure where to start? Here are five must-ask questions to ensure you’re getting the coverage you need to keep your small business in the black when a catastrophic accident occurs.

  1. How much coverage do I need?

This answer varies from business to business, depending on the size and value of the operation. Keep in mind that brick-and-mortar storefronts are at extra risk; it only takes one customer tripping over a power cord, frayed rug, or merchandise rack to potentially put your business at risk. Work with your independent insurance agent to ensure you have enough coverage to handle expenses related to third-party lawsuits.

  1. When will I need umbrella coverage?

Don’t assume that your business should be a certain size before purchasing. It’s an unpleasant truth that your business might never reach that hypothetical milestone without the right coverage. An accident is just as likely on your first day of business as it is years into your operation. Cover now, so you can grow safely.

  1. What makes some umbrella coverage providers better than others?

Not all insurance providers are created equal and not all of them navigate the scale of umbrella claims as well as others. Make sure your agent connects you with a provider that understands the risks associated with your type of business, knows the ins and outs of managing large legal and medical scenarios, and is dedicated to making certain you’re getting everything you need within the scope of your coverage.

  1. What else can my umbrella provider do for me?

Some insurance providers add value by helping you proactively identify and mitigate risk, providing consulting and more. Liberty Mutual’s crisis management support, which offers up to $250,000 in expenses for PR consulting to help remake your post-accident image after a catastrophic accident, is a great example. Ask your agent which providers can do more than simply cover you.

  1. Can I afford umbrella coverage?

At the risk of sounding cliché, can you afford not to have it? The truth is that a single accident can be very costly to your business; and in an extreme case, can be enough to put you out of business. The cost of umbrella coverage is low–a fraction of the amount you pay to acquire your primary commercial coverage. You’ve invested your emotional, physical, and intellectual efforts into your business; it’s worth making this reasonable investment to protect what you’ve built so far–and what you’ll build in the future.

Click here to get a quote for Umbrella Insurance coverage.