Your Cybersecurity Risk.
Operating in the technology services industry requires your business to stay on top of rapidly evolving systems, software updates, client needs and so much more. Keeping pace with these development is extremely tough and increases the level of risk that an IT professional would have to go through. Here are some examples of IT professionals that may be affected.
What Insurance Should An Internet Business Purchase?
A) All Risk
The All Risk is an insurance package policy that is often used to provide a comprehensive coverage for small business who want to protect their own business equipment such as expensive software, computers, monitors, cloud-based system, etc.
However, the business nature of IT professionals is different from other professions. Majority of IT personnels would normally bring home office equipment such as laptops in order to finish their work and meet deadlines. In case a fire-related accident were to happen at home and causes damage to the computer, this insurance would be liable to cover the cost of the damage.
For an IT business to take up an All Risk insurance policy, it should specifically state the following:
- Type of Equipment: Serial Number and Total Sum Insured.
- Policy restriction: Whole Malaysia or Office Only
Insurance protection for equipment anywhere in Malaysia is more expensive than protection only for the office.
B) Cyber Liability
A cyber related IT insurance policy is more relevant to companies that are involved within the e-commerce space. With recent news such as the CIMB Data Breach and even the Facebook Data Breach, the security of client information has become of paramount importance.
Since the majority of start-up businesses are inclined towards technology as their preferred business venture, many up and coming start-ups are exposed to high risk for the data breaches. If the protected information is compromised, then the start-up would be liable for the expenses claimed by their client.
Cyber Liability Insurance can help pay for those expenses and reduce the burden on business cash flow.
Thus, IT businesses are encouraged to sign up for at least one, if not both insurance policies below:
1. The First-Party Cyber Liability Insurance
A coverage provided by Cyber Liability Insurance in their first section is as per below diagram:
2. Third Party Cyber Liability:
This coverage comes into effect when one of your clients suffers a data breach and sues your firm in order to recover the damages. Even more so if your company designed the programme for the client.
Take for example:
A majority of banks use software that are written by third-party coding companies. If and when there is a data breach, the losses may amount to millions of Ringgit. If the client feels unsatisfied with the report and/ or reasoning offered by your company, they have the right to sue your company for damages. Thus, the Third-Party Cyber Liability Insurance may help you pay the costs:
C. Employee Benefits Insurance
The Employee Benefits Insurance is a protection for your employees and offers additional incentives for them to stay within your organization. With growing importance on healthcare, it is important for the IT-related business to have a comprehensive healthcare package that covers inpatient and outpatient insurance benefits for their employees.
Additionally, employers can also add the Personal Accident insurance coverage into the employee insurance package for additional coverage pertaining to dangerous sports. By doing so, the employees would be covered for any accident during sports activities — which is where many personal accidents occur.
Author: Sharian Raj of NVS(M)SDN.BHD
NVS (M) Sdn Bhd is the company that brings to the public the Malaysia Business Insurance Calculator (SMCITY)
What is the Malaysia Business Insurance Calculator i.e. SMCITY?
Looking to remodel the cycle of for SMEs to get their business insurance, we built a customer-centric online product that is intuitive and responsive to fill the gap between insurance companies and their distribution channels.
Providing a guideline to open for negotiation with insurance company at an industry rate, our Business Calculator software allows business owners to calculate the average premium needed for their Business Insurance in relevance to each industry and/or Small Medium Enterprises.
After all, with the advent of technology, business owners are now expected to deal with insurance online. In the same way they use consumer friendly online technologies to deal with banking, payroll, accounting or sales, these online technologies equate to convenience.