Ecommerce business is one of the most profitable online ventures but it carries a number of risks. Some of these risks can result in loss of thousands of dollars and even lawsuits which can ruin your company. That is why ecommerce insurance is a wise investment.
The best way to stay safe is to familiarize yourself with the risks and then take the necessary precaution to shield your business. However, even when you do your best, it is still possible to find yourself in trouble.
Thus, you should consider e-commerce insurance to protect yourself and your business in case the untoward happens. Below are some examples of e-commerce insurance as well as an explanation of what they cover.
Product Liability Ecommerce Insurance
When you run an online store, you don’t interact directly with your customers but your products do. This is an insurance cover that will protect your business when a buyer claims that they sustained physical injuries as a result of using your products.
Public Liability Insurance
This is a form of insurance that protects your business when there is bodily injury or property damage to anyone visiting your business premises. It is an essential insurance cover for every business owner who has a business premise.
The insurance will cover the cost of the lawsuits as well as the damages awarded to the plaintiff.
Cyber Liability And Data Breach Insurance
Cyber attacks and data breaches are among the major challenges facing e-commerce today. Companies collect sensitive information from customers for communication and processing transactions.
Businesses have the responsibility of storing this information safely to keep it away from unauthorized access. Cyber criminals are always coming up with new and sophisticated ways to attack websites and online stores.
Thus, even with the best protection software you should still get insurance cover because you never know what tactics criminals will apply tomorrow. Data breach and loss leads to lawsuits and heavy fines. Cyber liability and data breach insurance will cover the costs when such a case arises.
If you work with employees then you should consider workers compensation. If an employee is injured while working for you, you will have to cover his medical expenses and possible lost income.
In some states, workers compensation is a legal requirement and thus check the laws well when you are employing someone.
This is meant to protect stock, business equipment and buildings against theft, accidental damage and fire. The insurance will give you peace of mind knowing that if something goes wrong, your losses will be covered by the insurer.
Business interruption insurance safeguards your income when your business is forced to close or slow down in case of physical damage to your goods or premises or an attack on your company’s system. The cover will reimburse you for the income you lost for a specific period of time or from the time you stopped operations to the time you resume.
The goods that you send to customers can be lost, stolen or damaged. Since these cases are common, companies end up losing a percentage of their revenue during shipping. This is a type of e-commerce insurance that will cover your losses in case this happens.
Ecommerce insurance helps cover your business from unforeseen risks. However, it does not replace the need to stay safe and exercise due diligence. It is only meant to cover what you cannot prevent.