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    Whether you just closed a huge new account or if you are moving into that sweet new office; chances are you need proof of insurance - and you need it fast!

    Here @ Insurance4Technology, we utilize the best insurance tech available to turn around customized quotes catered to your exact needs in hours, not days.


    Too Cool For Coverage

    I know, you're COOL. Right now you're probably in your sweet new office working on a reclaimed wood communal table while sipping espresso with your headphones plugged into you macbook. We get it... you're cool, your website is cool, everything about your business is cool. We love that you are cool! Insurance however is NOT cool, it's not something you want to have to think about, deal with and especially pay for.

    However, just because you're a young, cool, thriving business does not mean that you are exempt for being sued. Someone or another business is not going to forego suing you because you're cool. It amazes me some of the responses we get on why start-ups are not buying insurance. Some of these responses are, "We don't need professional liability because no one requires it of us"; "We don't need to comply with the insurance requirements because they need us more than we need them"; "We're pre-revenue so we have nothing to lose".

    Here are the appropriate responses: 1. Just because no one is requiring you to carry coverage doesn't mean they won't sue you... 2. Just because you may be out of compliance doesn't mean they won't sue you. 3. Just because you're pre-money doesn't mean that they can't and won't sue you.

    Too many start-ups have an untouchable mentality when it comes to lawsuits and insurance. When you are a young business you are still learning and likely making some mistakes. This is probably the time when you need insurance the most. 

    I hate to rant, but when a comprehensive policy that covers general liability, professional liability, data breach and your business owned property can be purchased for around $1,000 per year, there are no excuses for not protecting your business. If you don't buy coverage for your self, consider about buying it for your employees. Think about it. If you need to defend the business which will cost thousands of dollars, what jobs go first? 

    Before you get up for the next espresso shot, spend 2 mintues to get a quote here, I won't tell anyone so you can keep you're cool. 


    Cyber Liability Claims Examples

    Cyber Liability is understandably one of the hottest topics in the insurance industry right now. After several incidents by major corporations, every business needs to seriously consider their strengths and vulnerabilities when it comes to data security. We have written on this subject many times already, but this entry focuses on some claims examples to help you understand what types of potential claims you may face as business owners.

    Claim Examples

    Coverage Part A

    ·  Data Breach Liability: Alice owns a restaurant whose point of sale machines had been illegally skimmed with a small, hidden electronic device for eight months, affecting nearly 1,000 cards. Over those eight months, some cardholders became identity theft victims, and paid for their own credit monitoring; others had debit cards skimmed and were not able to recover stolen funds from their bank accounts because too much time had expired without them noticing the fraudulent activity. Victims banded together and sued the store for costs incurred, including paying for credit monitoring, recovering lost funds and expenses incurred in clearing their identity.

    ·  Security Breach Liability: Diane's real estate agency is sued by an e-commerce organization for its participation in a denial of service attack against the e-commerce firm. Diane's agency had antivirus and firewall protection on its computers; however, the firm had not made updates to them in the past couple years. It turns out their computers became infected with malware, which, when activated, participated in an attack against the e-commerce firm's servers, overloading them with requests and shutting down their system for a day. The e-commerce firm sued the agency, among others for lost revenue and costs to repair their server as a result of the neglect of standards of care by those unknowingly participating in the attack. Diane's agency paid over $50,000 in defense and settled for $30,000 in loss.

    ·  Defense of Regulatory Proceedings: Joe owns an appliance sales organization. Joe makes the decision to store client names, addresses, phone numbers and spending habits to help cross-sell their other products. The organization does not have proper security in place to protect the information. A hacker gains access to the personal information and sells it on the Internet. The state where the merchant is located accuses them of privacy law violations and sets up hearings to decide if fines will be assessed. Joe expends $10,000 to defend the company and is ultimately fined $30,000.

    ·  Payment Card Industry (PCI) Fines & Penalties: A small family restaurant in Utah was informed by their payment card-processing bank of a potential data breach of their point-of-sale system. A forensics investigation found they unintentionally stored credit card numbers. However, the payment card processor demanded indemnification for fines assessed by the credit card companies who alleged a data breach. The payment card processor withdrew $10,000 from the restaurant's bank account and sued them for the balance of $80,000.

    Coverage Part B

    ·  Data Breach Expense: A retail drug store chain is hit with a data breach exposing the credit and debit card numbers and expiration dates on a large number of their customers. State law requires the chain to report the breach and notify customers. The chain spends over $400,000 to hire a firm to conduct forensics to determine all those affected, re-secure its network, send out notification letters across multiple states and set up credit monitoring for the customers. In addition, $75,000 is spent on hiring a public relations firm to manage the publicity surrounding the event.

    ·  Cyber Extortion Threat Expense: Jerry, the president of an insurance agency, arrives at work to find he and his employees are locked out of the computer system. A hacker notifies him that they have 24 hours to pay $10,000 or all files on the server will be deleted. As the deadline nears, Jerry realizes that he cannot thwart this attack and he is forced to pay the amount demanded.

    Coverage Part C

    ·  Website Liability: A coffee shop with a cinematic theme posts links on their Web site to movie coming attractions and uses images from movies in ads on their Web site. However, the coffee shop never received permission to post these images. Several movie studios threaten lawsuits based on violations of intellectual property. At first, the coffee shop fights but then relents, agreeing to take down the postings after spending $10,000 in defense costs.

    ·  Website Liability: Mike owns a boutique hotel along the Florida coast. The hotel has a Web site that includes a section for customer feedback. Mike monitors posts daily and is shocked to find a one star review from a well-known hotel reviewer who stated that his room and the property in general was dirty and had poor customer service. Mike posted a reply on the blog that he remembered the reviewer, and he was the one who was unkempt, rude and confrontational with staff. The reviewer sued for $1,000,000 for libel and intentional infliction of emotional distress.

    Coverage Part D

    ·  Identity Theft: Carl is a small business owner of a local pizzeria looking to expand his operation. When Carl inquired about a loan to open up a new location, the bank turned him down for poor credit. Apparently his identity was stolen, and the thief had opened up additional lines of credit and was purchasing big ticket items such as a car and boat. They all went unpaid and collection attempts went to a fake address set up by the thief. Carl's operation is now headed toward bankruptcy as he cannot dedicate time to his business while he tries to clear his credit record nor can he access credit to keep the business going.

    Hopefully this provides insight as to why cyber liability is such a big concern and such a vital coverage to consider. Please contact Insurance 4 Technology today to learn more about protecting your business. You can also get an Instant Quote here with the option to add Cyber Liability Insurance. 


    Paper or Plastic: Cashless Buyers Increase Privacy Concerns

    Credit seems to make the world go round. Credit systems have been in place before currency. Credit cards and debit cards are simple to use use and banks have become savoy enough to build spending budgets and tracking systems to help consumers manage their finances. 

    The problem with the trend of becoming a "cash less" society is that the electronic transfer of funds jeopardizes our privacy and puts us at risk of financial loss. 

    Retailers and all who process payments have gotten much better about protecting themselves and consumers. However, there is still much work to be done. When major box stores and software companies that have security measures and staff in place that cost them billions per year, you would think that we would not be experiencing data leaks and hacks. 

    All of this cyber risk and news of privacy breaches makes it tempting to ditch the cards and go back to cash. Since that is unlikely to happen anytime soon, we need to learn from our mistakes as a society and try to correct problems before they occur then fix them when they do. As for the next generation, we should be teaching them to treat credit cards and debit like cash. This picture could as well be my son. We practice counting cash and charge and we teach him the value of a dollar, something that maybe is not done enough. As we move to less and less cash and more electronic transactions, it's very important our children understand the value behind it. At the same time, we can teach them the basics about how credit works and why it is so important to keep our information safe. 


    Even Visionaries Could Use a Little Hindsight


    Okay, this is not the real definition of hindsight, but this is how most people come to think of it. The official definition of hindsight is: the understanding of a situation or event only after it has happened or developed. 

    Most entrepreneurs go into business thinking they are going to have a jump start, be successful and build thier empire. Reality dictates that this is a rare occurrence. Even young tech companies require time to incubate and grow into thriving businesses, profitable or not... If you are a visionary starting your business you are likely taking time to make the right decisions. At Insurance 4 Technology, we have the opportunity to see many businesses come and go; to succeed and fail. In speaking with some of our clients that have succeeded and learning from those that have failed we have concluded that most wish their hindsight was better in these areas:

    1. Doing Enough Research Before Launching- Every new business is excited to show themselves off and hit the ground running, but without the proper research you could be making a premature move. Your business has plenty of brain power, but hiring independent consultants that are experts in market research and demographics could be the best investment you could make early on. Not only will you learn how to market and to whom, when and why, but you could learn that yourr your demographic is not quite ready for your product or service. Don't be the next Apple Newton (yes, even Apple can make mistakes).
    2. Paying Enough Attention to Market Trends- So you've done your research and launched because the world is ready. All too many businesses have failed because they do not prepare themselves for market trends. If you are selling a product or providing a service, be ready to change. It's easy to get tunnel vision when times are good, but not paying attention and adapting to change is a recipe for failure. One day your widgets may be talk of the town and you go through rapid growth, but unless you plan for constant improvement or added products or features, you may be hosting a garage sale to make money with your widgets in it. 
    3. Investing In the Business- Some businesses get off to a great beginning then start spending on new staff, new office space, fixtures and furniture. Before they know it there is no retained earnings and no capital to really grow the business. They may look for private or angel investors, but then make themselves vulnerable to losing equity and possibly control of their company. 
    4. Hiring Practices- Many business owners make great visionaries. However, just because they can start a company doesn't mean they make good Human Resources managers. Hiring the right people can be a science and this is a costly area to make mistakes. Consider using a staffing firm or hiring one person as your HR manager that can assist with hiring, management and firing if necessary. Employees are your most valuable assets, but sure you hire wisely and manage just as wisely. 
    5. Having the Right Insurance- Come on you had to know I would throw that in the mix. Many businesses fail because they fail to protect themselves. The cost to defend your company in a lawsuit could be enough to put you out of business. Smart business owners work with smart insurance brokers to get the right coverage. A tech insurance broker and risk manager can help you avoid accidents from happening and protect you if they do.

    We rarely see a startup go from Bootstrap to Bugatti overnight, but love to see it happen. Don't let hindsight get the best of you and keep you from being the next success story! 


    5 Business Insurance Myths Busted

    It sometimes amazes me to hear some of the reasons business owners provide about why they don't have insurance. Technology related business owners are some of the brightest people I've ever met, yet they too can fall victim to believing some of the common myths about why insurance is not necessary. Here are five of those myths followed by facts that may help expel the misconceptions:
    1. Insurance is TOO EXPENSIVE... While no one enjoys paying for insurance the cost to protect your business (likely your most valuable asset) is relatively small compared to your overall expenses. If fact, we have done the math... Between the hundreds of small businesses we insure, the average premium equals approximately 1.5% of gross revenue. That means that if your business generates $200,000 in revenue, your premium is likely $3,000 per year. Keep in mind that most of our clients have more than one policy, The premium typically includes general liability, professional liability and workers' compensation insurance if there are employees. For most about the different types of business insurance click here
    2. I don't need insurance because carriers deny most claims anyway... I'll admit that insurance polices can be painful to read and do have many exclusions. However, many exclusions are are added simply because coverage is afforded on alternate policies. For example a general liability policy will exclude workers' compensation related losses while a workers' compensation policy will have a general liability exclusion. A good insurance company and broker will help you look for coverage, not look to deny coverage. A professional insurance brokerage will guide you on what coverage you should consider so that when you have a claim you hopefully will have selected the appropriate coverage. 
    3. A loss will never happen to me... You got this far in business because you are smart, not frugal. No one is immune to a loss whether it's a professional liability claim or your laptop gets stolen from your car, chances are that you will have a loss. Whether you have coverage or not is up to you. You could do nothing wrong and still get sued. The cost to defend yourself alone could put you out of business. Protecting your business, your employees and everyone else that depends on you is just being smart. Remember, like mentioned above, your premium could be less that 1.5% of your revenue. 
    4. Insurance brokers will gouge me with fees... It's common thought that insurance brokers add exorbitant fees. There is a misconception about brokers vs. agents. Brokers work on their client's behalf while agents work on their carrier's behalf. Most brokers (like us) have access to several standard insurance carriers. We are appointed as agents and cannot charge a fee when we are directly appointed and paid by that carrier. 90% of the time we do not charge a broker fee. The only time we do is when we have to go to a non-standard market that pays reduced commissions or no commissions at all. By working with an independent insurance brokerage/agency like us, you benefit by gaining access to our many markets and expertise and probably not getting that mythical fee. 
    5. I don't need insurance because I can negotiate out of contract requirements... Good for you! We often encourage our clients to try to negotiate insurance requirements down that may be too high for their business. If you want to work with a major company they may not be willing to lower their requirements even if your contract is of small value (for them). However, even if you are able to get out of insurance requirements that does not mean the exposure is not there. If you have enough leverage to get insurance requirements waived, you probably provide a unique product or service. If you provide a unique service it means you are a professional. This means that your professional liability is probably higher than others that provide a common service... 

    Now that these myths are busted, please share them with your colleagues that may be at risk of losing their business because they believe some or all of the above myths. If you are starting a business or have already own a business and need insurance guidance, please contact us anytime. Maybe there are other myths of there that we can help bust...

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