Business insurance isanextremely important purchase that every business owner hopes they never need. Ifyou own asmall business, you might beunsure whether ornot you need insurance. You may also bewondering what types ofinsurance are necessary. With somany different types ofcoverage andinsurance companies, choosing aninsurance plan can seem daunting. But neglecting theneed forinsurance could severely impact your business intheevent ofanaccident. This iswhy it’s important toeducate yourself about business insurance ifyou are unfamiliar with your insurance needs.
Adding more uncertainty forsome business owners iswhat todowith insurance when itcomes toecommerce. Digital commerce isplaying amore andmore prominent role inthebusiness world, with many companies focused exclusively onecommerce. Dothese companies also need business insurance? And ifso, what are theunique insurance needs ofanecommerce business? What isecommerce business insurance? Wecan answer those questions andmore below!
DoEcommerce Businesses Need Insurance?
Ifyou own anecommerce business, you might beasking this fundamental question. Doecommerce businesses need insurance? After all, your business islargely conducted online. With nophysical storefront, there isless personal liability, less chance oftheft, norisk ofworker injury, etc. But itisincorrect toassume that just because your business is
Ecommerce businesses need insurance just like anyother business. Ifyou are selling products online, you should still beinsuring your assets incase ofdamage. Product liability insurance isalso needed toprotect you andyour customers incase offaulty products. And even ifyour business does not have aphysical storefront oroffice, you still own physical property. Your homeowner’s insurance will not cover business property that’s stored inyour home.
One common misconception among ecommerce business owners isthat there isnothing toinsure because they conduct business exclusively online. But ifyou engage inecommerce, you likely deal with sensitive data andinformation. This could simply befinancial information belonging toyourself andyour customers. You may also have access toother personal information foremployees, clients, orpartners. All this information must beprotected, andyou should beinsured intheevent ofadata breach.
Nomatter what your business is, ifyou engage inecommerce, you should have insurance. Let’s take alook atthedifferent types ofinsurance that ecommerce businesses need.
What Insurance DoINeed forMyEcommerce Business?
General liability
General liability insurance, asthename suggests, isthestandard insurance type toprotect you from damages. Inbusiness, general liability insurance can protect you incase somebody isharmed using your product orservice. General liability insurance will cover claims ofbodily harm, property damage, libel, slander, andcopyright infringement. All businesses, including ecommerce businesses, should have general liability insurance.
Product liability
Product liability specifically provides coverage forbusinesses intheevent that afaulty product causes bodily injury. This issimilar to, but more specific than, general liability insurance. Product liability insurance specifically focuses onthedesign, manufacture, anduse ofacompany’s products.
Product liability offers coverage forbusinesses inafew ways. Ifacustomer requires medical treatment due toaninjury caused byyour product, your product liability insurance can cover their medical expenses. Product liability insurance can also cover your legal fees, aswell assettlement fees. Product liability insurance isamust foranycompany that sells andmanufactures physical products. Even ifyou believe your product comes with little tonorisk, itisbetter tobeinsured.
Business property
Business property insurance isaninteresting insurance category, andalso anextremely important one. Even ecommerce businesses should absolutely have business property insurance. Toillustrate why, consider thefollowing example.
Suppose you run asmall ecommerce business out ofyour home. You store your products andbusiness equipment inthehome. You have homeowners’ insurance toprotect against damage toyour personal property. Then one day, bysome accident ortheft, your business’ inventory islost ordamaged. Does your homeowners’ insurance fully cover that? You might have limited protection, but not totheextent that you would like.
But with business property insurance, anyproperty belonging toyour business isfully insured. This does not just apply toecommerce businesses operating out ofapersonal residence, ofcourse. Every business has some form ofphysical property worth insuring. That could beastore, anoffice, oryour inventory.
Business property insurance will cover anyloss, damage, ortheft ofproperty belonging toyour business. Inmost cases, itwill cover thefull cost toreplace anylost ordamaged property aslong asthecost isproperly documented.
Cybersecurity
Ifyour business isengaged inanyform ofecommerce, you likely have access tosensitive data. Ataminimum, you receive financial information from your clients andcustomers. Payment security isavery important aspect ofecommerce all around theworld.
Depending onyour industry orthetype oftransactions you process, you could have agreater volume ofsensitive data. This data isalways atrisk ofcyberattack. Ifyou donot have cybersecurity insurance, this could beaserious problem.
Cybersecurity insurance is
Workers’ compensation
Workers’ compensation insurance isalegal requirement inmost U.S. states. Even ecommerce businesses need tobeinsured incase anemployee isinjured intheline ofwork. This istrue even ifyou are theonly employee atyour company!
Workers’ compensation insurance covers medical expenses andlost pay caused byinjury, disability, orchronic health condition. There isalways arisk ofaworker being injured atanyworkplace. Even ifworkers’ compensation insurance was not alegal requirement, wewould highly advise all ecommerce businesses toget it.
Other types ofinsurance
There are other types ofinsurance that may berelevant tosome ecommerce businesses, but not all. Transit insurance, forinstance, covers large shipments ofinventory ifyour company deals with
Ifyou use acompany vehicle inyour business, you will need commercial auto insurance. Commercially registered vehicles require aseparate policy from personal vehicles. Even ecommerce businesses may sometimes use acommercial vehicle forsome aspect oftheir business. Ifthis isthecase, you will berequired toget acommercial auto insurance policy.
There may bemany other examples ofspecific insurance policies forniche businesses. Ifthere isanarea ofyour business that isn’t covered byinsurance, besure toresearch policies forbetter protection.
Best Insurance Companies forEcommerce Businesses
The Hartford
The Hartford offers arobust range ofbusiness insurance options tosuit avariety ofbusinesses. But The Hartford also arguably provides thebest insurance forecommerce businesses. This isbecause their wide range ofinsurance types (general liability, workers’ compensation, commercial auto) ismatched with very strong cybersecurity insurance.
Small business owners can create acustom Business Owner’s Plan which includes all thebasics ofastrong cybersecurity insurance policy. For those looking formore expansive cyber protection, The Hartford also offers comprehensive cyber liability insurance policies.
The Hartford homepage
Hiscox
Hiscox isasmall business insurance provider that offers avery comprehensive cybersecurity package. This makes them anideal choice forsmall ecommerce businesses. Hiscox iswell versed intheneeds andchallenges ofinsuring small businesses, especially those who conduct business digitally. Hiscox even provides its clients with complimentary access tothecybersecurity platform Paladin Shield asanextra defense measure.
Hiscox homepage
Chubb
Chubb isaninsurance provider that covers awide range ofclients. From individuals andfamilies, tobusinesses both small andlarge, Chubb has a
Choosing theBest Insurance forYour Ecommerce Business
When selecting your insurance provider, itisalways best toshop around. Get multiple quotes, andlook forthepolicy that provides thebest coverage atthebest price. The most important thing istounderstand theneeds ofyour business, andwhat needs tobeinsured. Remember that insurance coverage should protect everyone involved inyour ecommerce business. You, your employees, andyour customers may all need help from your business insurance atsome point.
Read more about security foryour online business?
- Ecommerce Fraud: How toProtect Your Store From Online Shopping Scams
- Ecommerce Security: 8Steps toProtect Your Store Against Cyber Threats
- Ecommerce Security: How ToProtect Your Online Store From Cyber Threats
- The State ofEcommerce Payment Security
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