The One Must-Have Insurance Policy For Online Businesses


The One Must-Have Insurance Policy For Online Businesses

For every good, there is an evil, it’s just a fact of life. So while the internet makes it easier to run our entire lives digitally, there is just as much risk of having our lives ruined through the exploitation of the data we entrust to so many online businesses.

As an eBusiness owner myself I’ve read all the tips and tricks of growing your online presence, and generally speaking they centre around the capture of personal information so that we can build our client databases, sell more goods online, and increase traffic to assist in the sale of advertising space. So you put in some MailChimp code, get yourself a standard Privacy Policy and away you go.

But did you know that you have a duty of care to ensure the safe storage of your client’s personal information? And it’s not a duty you can get yourself out of even with a rock solid Privacy Policy.

What this means is that if there is a breach whether from malicious software, hackers, or you decide to start a joint venture and share your database without the adequate disclosures in place, those people whose data has been used other than for its intended purpose can sue for breach of privacy – even if your website was the victim. The same also applies to having your phone line hacked and having client’s credit card information stolen from the EFTPOS machine. It’s your responsibility to ensure their data is protected at all times.

So there’s a bit of a risk here, especially if your website is solely online, and one little mistake could put you out of business for good.

What do we do with risk? We transfer it of course! There’s a risk of a fire in the kitchen, you take out property insurance. There’s a risk of crashing your car into someone, you take out car insurance. There’s a risk of having your client’s personal information stolen from your server? You take out insurance for that too.

The class of policy is called Cyber Liability and it’s a growing trend across the globe with more and more businesses learning from the Sony scandal which saw the theft of information from 24.6 million accounts on the 16th and 17th April 2011. Big oops.

The great thing about Cyber Liability products these days is they often include an optional Business Interruption component. Business Interruption responds when your business is interrupted, for example if a car drives through your shop front and you can’t trade for 4 weeks while the repairs are carried out. Insurers have seen the need and matched this by including Business Interruption for eBusinesses who wouldn’t be able to trade if the website was hacked and had to be shut down for a period of time. Handy right?

So if you’re sitting there enjoying the flexibility of working from home because you run a website like Get Informed, you should seriously consider having a chat to an insurance professional about Cyber Liability Insurance.  Who you can find on Get Informed incidentally. Don’t worry, I have a policy myself so if your information is hacked I can pay you damages.

Kate Fairley

CEO at

As an ex-insurance broker turned consumer advocate, Kate Fairley Director of Get Informed is passionate about all things insurance. She's waging a war against direct insurance companies and their fine print by unlocking the secrets of insurance for everyday consumers, and promoting the benefits a general insurance broker has to offer.

Comments (3)
Neil Steggall

Neil Steggall, Partner at Wardour Capital Partners

A really interesting article on a topic which (like most I guess) has never crossed my mind. Thank you very much for sharing!!!!

Steven Freeman

Steven Freeman at

Very interesting insurance product. Being hacked in some shape or form is inevitable for many businesses and the risk factors are on the rise. Some of these Cyber crimes are so severe, and other than a potential payout these policies can't easily restore your business in the same way a house can be re-built in the traditional sense.

View all (3) comments