Melita Thurling, head of SureThing at iTOO Special Risks, says many business owners assume basic public liability insurance provides sufficient protection, without considering how their digital activities and wider operations could expose them to claims.
“We have moved into a virtual space where aspects like data, online presence and reputation are becoming just as important, if not more important,” she says. “Many small business owners haven’t realised that this shift has exposed them to liability claims that go way beyond what traditional insurance policies used to cover.”
Traditional liability insurance has generally focused on physical injury or property damage, such as a customer slipping on a wet floor or damage caused while carrying out a job. However, businesses can also face claims arising from data breaches, incorrect advice, online defamation, reputational harm and allegations of unfair discrimination in the workplace.
Thurling says greater consumer awareness of legal rights is also contributing to the risk, with customers increasingly willing to pursue disputes against businesses.
Cyber incidents are another concern. Smaller businesses may assume they are unlikely targets because they hold less data than large organisations, but Thurling warns that limited cybersecurity can leave them particularly vulnerable.
“Small businesses are just as vulnerable, if not more vulnerable, because hackers know they don’t have effective cybersecurity, or any cybersecurity at all,” she says.
Cyber incidents can result in financial losses, claims relating to compromised data, regulatory scrutiny and reputational damage.
Basic cover may leave gaps
According to Thurling, some SMEs rely on basic public liability insurance, with limited extensions for products or employment-related risks, without checking whether their policies address newer exposures.
These gaps may include reputational harm, online activities, data breaches and risks linked to the Protection of Personal Information Act (POPIA).
Even where businesses believe they have sufficient cover, their policies may not reflect the full scope of their activities. Thurling says owners often lack the time or expertise to review their insurance requirements in detail, while incomplete disclosures to brokers can also leave important risks unaccounted for.
Specialist liability products have emerged to address some of these exposures. The release cites SureThing, underwritten by iTOO on behalf of Hollard, as one example of a solution that combines different types of cover in a single package.
Depending on the policy, cover may include professional indemnity, cyber incidents, reputational management, legal assistance relating to POPIA and defective workmanship.
Thurling advises business owners to look beyond whether they have insurance and assess whether the protection matches their actual operations.
She recommends discussing data handling, advice-based services, cyber exposure and legal defence costs with a broker, while providing a detailed account of the business's activities.
“The better solution is to help the broker understand your activities as deeply and widely as possible,” she says. “Often descriptions are very brief, and the broker doesn’t realise there’s a component of the business that needs additional cover, and that’s exactly where the claim arises.”
As SMEs adapt to changing operating conditions, Thurling says liability insurance needs to account for risks arising both inside and outside their physical premises. Business owners should review policy wording, exclusions and limits rather than assume that a broad policy name guarantees protection against every potential claim.
