Important Coverage Categories for E-Commerce Business Insurance
E-commerce companies that interact with customers solely online might not have to worry about traditional slip-and-fall accidents, but other issues could expose you to liability or risk. To select the commercial insurance coverage that could support your business goals, you will need to consider issues like cybersecurity, product liability, losses during shipping and vulnerability to business interruption.
If your diligent computer security efforts fall short, then insurance could insulate you from the costs of a data breach. As the operator of an online business, your position is vulnerable to cyber-attacks, and a serious data breach could produce substantial liabilities that might endanger your ability to remain in business.
As an e-commerce retailer, you could incur costs that result from defective products that endangered consumers. In some situations, the liability would fall on the shoulders of the manufacturer if you were only distributing a product. However, if you are the manufacturer or you mishandled products as the retail distributor, then you would need product liability insurance to protect you.
Shipping Problems and Property Protection
As an importer or drop shipper, you depend on products arriving safely at their destinations. Inventory losses during shipping would likely be your financial responsibility. If you ship substantial amounts of product, the limited coverage offered by freight companies could be insufficient. Once your inventory reaches your warehouse, then a property protection policy could become active.
Interruption of Business Operations
Insurance for business operations will specify covered events that disrupt your ability to generate revenue. As an e-commerce company, you might want to insure against risks like a warehouse fire or a computer server failure.
If your e-commerce company depends on major online retail venues to reach customers, then something known as suspension insurance could be vital. Issues beyond your control might result in a retail platform suspending your account, which could be devastating to profits.
A conversation with an insurance agent could provide you with precise insights about your risk areas and commercial insurance options.