You've heard all the hype and know the benefits the Internet can bring to any small business. But the Web brings potential hazards, too. This month, we look at three of the biggest business risks in cyberspace and how you can protect yourself.
A Tangled Web
Well-designed Web sites can reach thousands of potential customers, but they can also leave your company vulnerable. "I call it `shark-infested cyberspace,' " says Nancy James, principal of N.P. James Insurance Agency in Concord, Massachusetts, and a specialist in cyberspace liability. "There's insurance to protect you, but we're talking about very expensive policies that might not protect you from every risk."
If you have a Web site, James notes, you're technically considered a publisher and are therefore liable for all the same things as a major publisher, including being sued for plagiarism, copyright infringement and libel. In addition, there are no geographic boundaries on the Web, which can lead to potential trademark risks. A business in Chicago with the same legal name as a business in Atlanta never used to worry about customers confusing the two. On the Web, however, these companies might end up suing one another.
How can you protect yourself? James recommends that in addition to beefing up your liability insurance, you should invest in a few hours of legal advice before opening your online storefront. And don't put up your Web site without including a rock-solid disclaimer. Want to learn from a company that can afford the very best in insurance and legal protection? Check out Microsoft's online disclaimer at http://www.microsoft.com/misc/cpyright.htm
An employee posts a message in an Internet chat room, claiming that your company is selling a dangerous product. Your senior manager sends a group message that contains a racist comment. A disgruntled ex-worker sends a broadcast e-mail to your competitors that includes confidential information about your company.
Entrepreneurs like you have faced these and other kinds of electronic crises: Although giving your staff Internet access makes communication easier, it also means that an employee might be able to break your business with the press of a key.
Your first defense is to make sure your existing liability insurance includes coverage for electronic messages. "It's important to check the language in your policy," says James. "Electronic communication might specifically be excluded." If your policy doesn't specifically exclude electronic communication, you will be covered in most cases.
To protect yourself even further, develop a simple one-page document for your employees that outlines rules about electronic documents. State clearly what kind of communication is and is not appropriate and how to respect the confidentiality of company data. Let them know that if they break the rules, they'll be prosecuted.
For more help, pick up a copy of E-Policy: How to Develop Computer, E-Mail, and Internet Guidelines to Protect Your Company and Its Assets (Amacom Books) by Michael R. Overly.
Even the Pentagon's computer systems have been the victim of break-ins by savvy computer hackers. How do you protect yourself from electronic breaking-and-entering? ICSA Inc., an Internet security services provider in Reston, Virginia, offers its networking services' customers insurance that compensates them for any network damage resulting from a hacker break-in. For more information, visit ICSA's Web site at http://www.icsa.net/trusecure or contact the company at (703) 453-0500.
N.P. James Insurance Agency, (978) 369-2771, http://www.npjames.com