Running your own small business is hard work. Whether you’re a graphic designer, an IT consultant, or a photographer, providing professional or creative consulting and services requires you to be nimble and resilient, like a superhero. But even superheroes like Spider-Man can run into trouble.
You see, Spider-Man fights crime by night, but by day he’s Peter Parker, a freelance photographer. Even with his spidey sense, Peter finds himself in sticky situations that can be costly for his business, especially if he doesn’t have the proper protection. As a small business owner, you may find yourself in these situations as well. Here are 3 common claims scenarios that professional and creative service providers like you and Peter face, along with tips on what insurance coverages can help you shield your business. (not all superheroes have capes!)
Errors & Omissions: Everyone makes mistakes
With the type of services that you provide to your customers, mistakes are bound to happen. You might think a mistake is only Ant Man-sized, but it could be significant and can be costly to both your customer and your business. If you’ve made errors or omissions in your work that’s resulted in a loss for a client, they may look to you to cover their losses. Let’s take a look at an example.
Peter is shooting some photos of Spider-Man for a client, J. Jonah. Jameson. A few weeks after the job has been completed, Jameson points the finger at Peter and claims that the poor quality of the photos has directly cost Jameson and his publishing business lots of money. Jameson decides to sue Peter for the costs stemming from these losses (fun fact: this is very similar to a plotline in Spider-Man 3). Even with Matt Murdock as his lawyer, these lawsuits can be costly for Peter’s business. Luckily, having technical errors and omissions (E&O) insurance can help Peter (and you) mitigate the costs associated with these types of lawsuits.
Sure, there are ways that you can minimize E&O risks, including staying organized, double-checking your work, and planning head. Sometimes, however, mistakes just…happen. That’s why having technical E&O insurance may be beneficial for you and your business. Knowing that you’re covered in the event of an error or omission in your work will help keep your mind at ease so you can focus on your business.
Cyber Claims: They happen to businesses of all sizes
As a professional or creative service provider, you rely on your computer for a significant part of your work, which exposes your business to cyber crime. You might assume that cyber attacks only happen in TV shows, movies, and comic books. The truth, though, is that 43% of spear phishing emails and 54% of spam emails target small businesses.
Small companies tend to be easier targets because they often lack the resources and firewalls that larger ones use to fend off cyber attacks. Here are some ways to defend yourself:
- Make your passwords unique and update them on a regular basis.
- Don’t click attachments or links from people you don’t know: if you receive a sketchy email from someone you do know, give them a call to confirm that they sent something to you.
- Install anti-virus software on your computers: this can protect you from email attacks and sketchy attachments.
- Read the terms and conditions when downloading software: this will include details on what kind of access you’re giving to various parties.
- Update your software often; these updates will include security enhancements and bug fixes that could help defend you from cyber attacks.
- Back up your data. If your business does become a target, it’s important to always have a backup of all your files secured. You can use cloud sharing or an external hard drive to do this—better yet, why not both?
These tips can help you shield your business from unwanted cyber threats, and having cyber event expense insurance can also help you cover your business in the event of a breach. Cyber insurance can help cover costs involving responding to the breach and recovering lost data. Let’s look at an example on how cyber insurance can help protect you from cyber villains.
Peter uses his laptop to develop his photos and store customer data. One day, he opens a suspicious email from Doctor Octopus and unknowingly downloads malicious software. This causes Peter to lose all the photos and data that was stored on his computer. This is extremely concerning, as it could impact both Peter’s finances as well as his reputation with his customer.
Luckily for Peter (and for you), having cyber event expense insurance can help cover costs of recovering his lost photos and data, allowing him to quickly get his business back up-and-running without ruining his reputation with customers./ Having this coverage can protect you from the effects of an attack by Doctor Octopus and other dastardly evil-doers.
Commercial Auto Claims: You need more protection than you think
As a professional or creative service provider, an aspect of your business may involve you using your personal vehicle. You might assume that, in the unfortunate event of a car accident, you’re personal auto insurance will cover you for damages. But you should never assume things. Take a look at the following questions:
- Do you use your personal vehicle to visit clients or transport customers?
- Do you transport business equipment or deliver goods and merchandise in your personal vehicle on a regular basis?
- If you have employees, do they drive your personal vehicle for work-related purposes?
- Do you have any marketing or advertisements on the outside of your vehicle promoting your company?
If you answered yes to any of these questions, then you should consider getting commercial auto policy for your business, as your personal auto policy will likely not fully cover you in certain scenarios. There are a few key differences between personal auto insurance policies and commercial auto insurance policies that could open the floodgates of your business’ bank account. Without a commercial auto insurance policy to protect you, you could personally be on the hook for the repair or replacement costs.
Let’s look at Peter as an example. When Peter drives to different photoshoots (he can’t be swinging from webs all the time!), he keeps his expensive cameras in his back seat. If he gets involved in a fender bender, he may not be covered by his personal auto policy, as he’s using his vehicle for business purposes. To properly protect his cameras and his car, he’ll need a commercial auto policy.
If this happened to you, you would be on the hook for your damaged equipment as well if you didn’t have proper commercial auto coverage. Depending on what you were transporting – and the extent of the damage caused by the accident—things could get expensive. Getting commercial auto insurance can help you cover these costs.
With a great small business comes great responsibility
Just like being a superhero and solving crime, running your own services company can be an exhausting but gratifying experience. Knowing the common risks that you face on a daily basis can you proactively protect your business and keep it running smoothly.
But just like superheroes, it’s always good to have a sidekick like TruShield by your side. Having the right coverage for your professional or creative services business can help you cover costly losses and keep you focused on amazing your customers with your work. Technical E&O insurance, cyber insurance, and commercial auto insurance are just a few examples of how TruShield can help cover your business.
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This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.