You could lose everything if you don't have this...

Good Heads Up Ron

Also worth mentioning having

Accountant
Tax Adviser
Legal advice/ Solicitor

Kenj

I ran my Computer repair business for years having only I break it I pay for it policy.

But with IM I just make sure I cover my butt with every disclaimer known to man and I will always honor a refund request.

Just my opinion

Ron,

I totally agree.

And...

Don't think you're immune because you are based in
a different jurisdiction from your customers... with
the right lawyer, they can still come after you.

John

Ron - can you elaborate more on how you can get this/must all business owners e.g IMers have it?

Totally agree with Ron. A liability insurance is a must for any business that sells any type of products or services. It doesn't cost a lot and the peace of mind it brings can definitely add years to your life. Also, don't forget that the insurance premium you pay is tax deductible.

online business isnt any different to offline so a rule number one is to get yourself insured. its a must these days

Thanks for the informative post I will be sure to contact with an agent about this! It's too bad that for the most part, people can sue for just about anything that is not in their favor...

I really haven't thought about Liability Insurance for online marketing.

I had general liability for an offline venture that ended close to two years ago now which was for $1-2 million dollars. The semi-annual premiums were $319 so it was not bad.

I went through an independent agent who was able to shop around what I was needing to get me the best price possible. I think he told me he got bids from about 30 different insurance companies. The agent was able to get it issued through the Southern Insurance Co of Virginia (one of their offices near Atlanta) which is apart of the Donegal Insurance Group. Liability insurance is well worth the price.

So wait a minute, hosting my site in another country and updating it through proxy server's isn't enough?! I have to get INSURANCE on my business now?

More seriously I had never thought much about it. I guess my biggest question would be, is $1 million in coverage enough these days? And what happens to your premium if your actually sued?

This is something I've actually been looking into, but never really took it seriously until now! Love your website by the way! :-) Thanks for the heads up on this subject. I'm glad its brought up!

For UK readers, you can arrange to get public liability insurance from your bank when you set up a business account. I'm not sure if this is the best deal or not but they definitely offer the service.

Great advice - thanks for sharing your thoughts!

Just wondering if anyone here has been the victim of any sort of lawsuit relating to your online work?? (not intended as skepticism - I'm actually really just curious by nature!! lol)

Yeah, totally agree with you, Ron. Protections are very welcome in this type of job, including accountant, etc.
I'm a newbie in IM, and this forum is surelly helping me out with things WSOs usually don't bring within.
Thanks for the advice.

Also - look into the difference between Liability Insurance (which I always used to have when I ran courses in outside venues) and Professional Indemnity Insurance - which I suspect is the UK version of what Ron is talking about.

Whatever type of insurance you buy, be sure to read the policy and coverage carefully. Pay particular attention to exclusions. Many insurance policies have all kinds of exclusions. Talk to your insurance broker extensively about the right plan for you.

Other insurance to consider is disability insurance. What would happen if you couldn't operate your business anymore due to injury/illness? You may or may not be covered by public unemployment insurance. Besides, public insurance often has a cap (in both amount and duration) and if your lifestyle is a six-figure lifestyle, it'll take a decent liability policy to cover that.

Just as with business liability insurance, read the disability insurance policy carefully. For example, many people who have long term disability believe they're covered to age 65. The fact is many long term policies are only good for 2 years. I paid extra to age 65.

You might be able to get a better disability insurance policy through your company. I purchased it privately because that worked best for me.

Being properly insured is risk management, which every business needs to do. I've worked with many people not properly covered and the financial consequences can be disastrous.

Finally, depending on your jurisdiction, you may be able to have funds in your retirement account that are Court Judgment proof. It requires a specific financial vehicle for this. It's worth looking into. The management fees are a little higher, but it would be a shame to lose your retirement accounts as well.

I know I veered off topic a little from the OP, but my points are all related to business and personal risk management.

Insurance agents will generally give you advice for free because they're selling policies. I've learned a ton from my agent. Same thing with business liability insurance.

However, accounting, financial planning and legal advice will cost you - but it's not too much and could well be worth it in the long run.

I know it's not fun paying premiums year after year. However, I consider myself fortunate if I never have to make a claim. Making a claim means something went wrong. Premiums pay for peace-of-mind and hopefully cover you in the case something goes sideways.

The OP is so right. And another thing I think many of us fail to understand is a legal plan. I pay $17 a month in order to be able to call a lawyer any time I need one. Even if I get arrested on Christmas day, I can have legal representation within minutes. And any problem I might have, I just call the lawyer and they will advise me, possibly make a call or write a letter on my behalf. And if you ever need to use that insurance, you will probably need a lawyer to advise you and help you stay out of bigger trouble.

I can add a rider to that for a few dollars to cover my home based business. And any time I have business issues, they are covered as well. Currently I can only call about one business issue per month so I am covered for my needs.

I see so many people come to the forum and ask legal questions. If they had a plan such as mine, they could call the lawyer and get a legal opinion, not just layman's advice here on the web. Which is kind of dangerous.

I also have the identity theft protection that they offer. I think this is the best plan around. They monitor my identity and if there is any breach, they will go fix all the damage. I hope it never happens, but what a headache if it ever does. But all I have to do is sign one piece of paper and Kroll will take care of it. I might have spelled their name wrong.

If you run webinars or any type of online broadcasting, including videos and podcasts, then you should also consider getting errors and omissions insurance. This will protect you if you or one of your guests says something that maybe you shouldn't.

As always, great post Ron - thanks for sharing.

I've been talking about Risk Management for years on the WF, and this is a basic component of it that's often overlooked.

The more successful you become, the more well know you are, the greater the risk of being sued, even if it's a frivolous suit.

Someone mentioned not being in a litigious country - if you're doing business internationally, you're still at risk. Not just from individuals, but from governments as well.

I highly appreciate you sharing this Ron.Absolutely true, many people these days are "Sue Happy" and some even make a living off that.There was a show on TV recently about a person who makes his living "his business" off of suing other business.

Wow, I don't think I ever would have made the connection between insurance and IM. But then again the things people sue over these days is absolutely out of hand. Thanks again though that one would have went over my head for probably far too long.

Risk can be somewhat graduated depending on if one is selling a physical product as a proprietorship; or if one is selling say, a downloadable IM product as a corporation. There's always greater risk as a proprietor, but that doesn't necessarily negate the risk for an officer of a corporation. Either way, it's better to be safe than sorry.

This thread hits home for me because my business just recently (in the last 4 months) started to produce enough that I could quit my job (and did).

Another thing worth mentioning is to start an escrow account of some sort to funnel money into for tax time. Also, I just recently got myself an accontant and let me tell you - it doesn't take long to get into trouble with the IRS if you are making a lot of money online and not doing the right thing.

Just as bad as being sued is receiving a letter from the government saying you owe then $10K plus interest in back taxes.

Another simple thing that you can do to at least avoid paying on a lawsuit (it won't really prevent it) is to have the proper legal forms on (or linked to from) your sales page. I also always usually add the actual earnings disclaimer in small print right to the sales page.

Another important thing to mention is it's necessary to have these legal forms to satisiy Paypal. They can suspend your account permanently (I know people it has happened to) if you don't have an earnings disclaimer and privacy policy/terms of service page accessible from your sales page. They consider it a reckless business practice not to have these and can classify you as high risk (which they consider the IM niche already) because of it.

Great thread. Very important stuff.

Wow, this is really good. I could not agree more. It is very important to get your business incorporated so that the liability will not fall on you if anything happens and find a good accountant.

I'm in the process of getting professional liability insurance and a BOP, and found this thread. I'm resurrecting it for the benefit of the people that haven't thought about this yet as it is super important.

I'm an internet consultant and often give advice to people on what to do and what not to do on PPC, SEO, their websites, etc... I also host sites and do website designing.

The other day one of my clients, a lawyer, asked me if his emails were secure... I said yes but made me think what could happen if someone hacks into my server, if all the data gets stolen, deleted etc.

I'm using Stripe as payment processing for another client. I know the payment part has SSL, and I'm using Stripe's secure connection but could they (the client) sue me for something if things go wrong? Even if I'm not to blame, how much would it cost to defend myself...

I think the peace of mind the insurance gives is worth the $1K a year they normally costs..