Online businesses are exposed to a multitude of risks, any one of which could damage or even destroy the business.
Some type of business insurance can cover your business for privacy protection, cyber liability, cyber extortion and more.
What types of risks do online businesses face?
Where once a bricks-and-mortar business would face the risk of someone slipping on their wet shop floor and suing them for damages, liability has now moved into the cyber realm.
A business now risks harming its customers through digital means, such as inadvertently spreading viruses or malware in marketing emails or compromising customers’ privacy and personal details via an online security breach.
And unfortunately these new exposures are not instead of the normal risks but as well as, meaning a business must not only insure itself against online risks but also take out other more traditional forms of business cover. These might include product liability insurance if they are selling goods online and professional indemnity insurance if they are offering professional services or advice online.
Finder survey: Do Australians from different states think business insurance is worth it?
Response
WA
VIC
SA
QLD
NSW
Yes
76.86%
77.56%
75.27%
68.66%
74.01%
No
23.14%
22.44%
24.73%
31.34%
25.99%
Source: Finder survey by Pure Profile of 1112 Australians, December 2023 Data for ACT, NT, TAS not shown due to insufficient sample size. Some other states may also be excluded for this reason.
What does a typical policy cover?
Privacy protection. Covers legal costs and indemnification for privacy breaches and loss of customer information.
Breach costs. Covers data recovery and repair costs following a breach (both physical and reputational).
Cyber business interruption. Compensates the business for lost profits while it is unable to trade due to a breach.
Cyber liability. Covers legal costs and compensation for third parties who suffer a loss as a result of the business.
Hacker damage. Covers the cost of repairing damage caused by a hacker to a website, network or database.
Cyber extortion. Covers the cost of ransoms and forensic investigation if data is hijacked.
What types of insurance should online businesses consider?
An online business should also have a range of traditional business covers in its portfolio, including:
Workers compensation insurance: if you pay annual wages. It is compulsory in Australia but differs in every state and territory.
Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio
Gary Ross's expertise
Gary Ross has written 644 Finder guides across topics including:
Liability insurance is a broad term that describes a few types of business insurance cover. The type you need will depend on the nature of your business.
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