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For most entrepreneurs, being a solopreneur is the reality. You’re a one-person team, managing everything from HR to sales. Just because you run the business alone, however, doesn’t mean your business isn’t at risk for data breaches or complaints of negligence.

As a business owner, you expose yourself to a wide variety of risks, from environmental to digital. For example, in 2017, half of all small businesses experienced a data breach, and 55 percent experienced a cyberattack, according to Insurance Information Institute (III).

Fortunately, you have access to a wide range of business insurance types, including cyber insurance, to protect yourself and your business against these unforeseen dangers and risks.

As you look at insurance for your business, consider the following factors, including cost, total coverage options, needs specific to your business and legal requirements.

Start with Your Homeowner’s Insurance

Homeowners insurance is the first place to start if you’re running your business from your home. Some companies will allow you to add riders to your current policy to cover business-related risks, property and equipment.

“For as little as $25 you can raise the policy limits from $2,500 to $5,000. Some insurance companies will allow you to increase your coverage up to $10,000 in increments of $2,500,” according to III.

Experts at III also explain that you can also buy a “homeowners liability endorsement,” which covers you in the event that a business visitor or customer gets hurt while in your home, i.e. tripping down the front steps. To bolster your coverage even further, get an In-Home Business Policy, which may reimburse for income loss and even pay for the extra expense of operating out of a temporary office if need-be.

Buy an Errors & Omissions (E&O) Policy

Everyone makes mistakes. As a solopreneur, one big mistake can mean the end of your business. Don’t take any chances, and instead, get the necessary E&O insurance. Art Neill, legal contributor for Forbes, calls this “a safety net for your business.”

E&O, also referred to as Professional Liability Insurance, protects you from malpractice and negligence, for example, if a customer feels your product or service didn’t meet their expectations. Note that this is different than general liability insurance.

Neill explains, “A general liability policy covers claims made for damage to a person or to physical property. A typical E&O policy, however, protects claims made for damages (the legal term for money) for things such as intellectual property infringement, data breaches, reputation, and other forms of intangible property.”

Don’t Forget About Cyber Protection

Did you know there’s an average of 130 online security breaches each year? That according to Accenture’s 2017 Cost of Cyber Crime Study. With so much of business done online, it's critical that your assets are protected—which takes more than just good encryption or challenging passwords.

"Cyber/Network Liability is insurance that protects the 83 million online companies exposed to security breaches. If a network goes down or private information is leaked and money is stolen from private accounts, Cyber/Network liability insurance will protect your assets," according to Business Insurance USA’s Tech Startup Insurance FAQ.

This insurance is easily confused with Tech E&O insurance, which is actually intended to protect businesses that provide technology products and services, like computer software. This may be applicable to your business as well; if so, consider both policies. If not, be sure to ask for Cyber Liability Insurance specifically.

Get Insurance, Protect Your Business

Don’t let your small business fall apart at the first sign of trouble. Get the right business insurance to protect all aspects of your business first and foremost. Start with your homeowner’s insurance, which may be all you need at the start. Don’t forget about the value of well-rounded coverage, including E&O and cyber liability, for greater peace of mind as your business evolves and expands.

About the Author(s)

Jessica Thiefels

Jessica Thiefels has been writing for more than 10 years and is currently a full-time freelance writer and self-employed content marketing consultant. She’s been featured in Forbes and Business Insider and has written for Virgin, Salesforce, Manta and more. 

Business Insurance