Recently my cell phone was hacked and data was wiped out. For a good few weeks I found myself in a panic. I hadn’t realized that I relied so much on my cell phone. However, in retrospect, I should have realized that these days, smart phones are our hubs for addresses, contacts and other personal and business information. We now tend to keep everything about ourselves on our cell phones. Everything is now at our fingertips.

Such a loss of data started me thinking about how business owners must be frustrated with their old insurance policies if they haven’t updated their policies to include coverage for essential digital information and devices.

For business owners, insurance policies have changed quite a bit from 20 years ago. As technology advances and computers and cell phones change to adapt to growing business needs, we find that businesses have become fully reliant upon digital information. Some retail businesses now consist of a warehouse that ship orders and these businesses rely on computer mainframes to keep client information and process orders that were placed online.

Most standard commercial business policies are very clear that only a certain amount of business interruption is covered in the event of a wipeout of digital information in the event of computer or mainframe failures. In fact, the loss of digital information itself is either not covered or severely limited in most circumstances.

For online businesses, not having the proper insurance policy that includes the pitfalls of the transfer of digital information and hacking can be fatal. For example, having a policy that doesn’t cover online fraud for a business that takes online orders may mean a unrecoverable loss of merchandise under your business policy.

I tell everyone that reviewing your policy needs is essential. However, if your business relies upon digital data passing through computers and mainframes, its time to update your policy to 2014 and make sure that your business is truly covered.