CPAdvantage October 2014
Are your clients protected?!
By Rob Basso
Advantage Payroll Services
It feels like one big headline after another has been making the evening news as big stores admit to data breaches and stolen information. It’s easy for your clients to think that as small business owners, they aren’t at risk for such a traumatic business event, but the surprising truth is that small business owners need the same protections as their large, multimillion dollar competitors for those reasons and more.
Small businesses can be affected by issues your clients might not even consider until they happen; it’s not just being protected from hackers compromising their network, but thinking ahead to if they or their business partner suddenly becomes incapacitated, if one of their employees sues for discrimination, or if they are forced to close for several days, or even weeks due to a fire, storm, or other catastrophic loss (something that became very real in the wake of Superstorm Sandy).
I’ve asked Gregg Knepper of Integrated Coverage Group to discuss a few of the frequently missed available business insurance policies that small business owners need to be aware of in our Question and Answers segment. If any of these have even remotely crossed your or your clients’ minds in the past, then your clients need to ask themselves: Is your business using the protection it needs?
Rob Basso, President
Q:My business is not nearly the size of Home Depot or Target, am I still at risk for a data breach or cyber-attack?
A:Yes, small and large businesses alike are targets for hackers and cyber criminals. In fact, smaller companies that have less sophisticated IT infrastructure are often targeted by criminals.
Q:My business does not accept credit cards; is my company still exposed to technology related losses?
A:Yes, there are many types of cyber threats. Hackers can hijack your entire network and limit access to you and your employees, only giving you access back to your own network after a ransom is paid. This type of “hijacking” has become more prevalent over the past year.
Q:How do I properly protect my business from cyber threats?
A:The first line of defense is proper IT protection including strong passwords, firewalls, and the safeguarding of physical IT assets (computers, cell phones, tablets, etc.). All businesses that use e mail, have a website, or store personally identifiable information should also have a cyber insurance policy.
Q:I have a Business Owners Policy (BOP); am I protected if one of my employees sues me for discrimination or harassment?
A:Typically, employment related claims are excluded from standard “BOP” policies. This type of exposure is best covered by an EPLI (employment practices liability) policy.
Q:What if one of the partners in my business can no longer work in the business due to an injury or illness? How will we continue to operate?
A:With the proper planning and protection, the devastation of a sudden loss of a key member of your team can be mitigated and allow your business to continue to operate and even thrive.
Q:What would happen to my business if it were closed for several days, or even weeks due to a fire, storm, or other catastrophic loss?
A: Approximately Forty percent of businesses do not reopen after a disaster and another 25 percent fail within one year according to FEMA. The best protection against this reality is to be prepared with a disaster plan and know how to properly execute that plan. Additionally, it is important to make sure that your insurance policies have the proper coverages, including business interruption and extra expense” coverage.