Insurance for e commerce: What Is It, And Do You Need It for Your online store?
The online retail industry has seen astronomical growth in the past decade, and with that raises unique challenges and risks to the store owner.
According to a study by BigCommerce and Square: 96% of Americans with internet access have made an online purchase in their life. 51% of Americans prefer to shop online in 2018.
E-commerce is growing 23% year-over-year, yet 46% of American small businesses do not have a website.
That’s a clear upward trajectory. And the barrier to entry for those businesses who don’t have a website has never been more permeable. User-friendly web design platforms have made it possible to launch an online store in a matter of hours.
Insurance is a tricky topic, especially when it comes to business insurance. The products are complex, and it’s easy to feel intimidated by the jargon.
On the other hand, insurance is an important way to protect your business, and if you ever end up relying on commercial insurance, it can be the difference between an unfortunate situation and a total disaster.
Getting the lay of the insurance landscape before you sit down to talk to a professional can help you both understand the process and understand which insurance products your business might need as it grows.
And if you’re still feeling intimidated at the thought, remember: When it’s used correctly, commercial insurance is just another product you buy, and what you need depends entirely on your business. And you already know and understand your business.
So, let’s dig in.
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Additional Coverage
You can customize your policy to include specific needs for your business. Some available covers include:
- Miscellaneous professional liability insurance, also known as errors and omissions insurance- If your business involves representing the needs of others, making a recommendation, giving advice, providing physical care, or designing products, clients or patients could sue you for failure to perform your business properly that harmed them in a way. Errors and omissions liability insurance covers such situations. It covers any judgment that the business is liable for and any legal defense costs that may be incurred. However, this insurance is subject to a limit.
- Outdoor property coverage- covers outdoor property such as fences, satellite dishes, plants and signs among others.
- Cyber liability coverage- covers any losses associated to cyber crimes such as data breaches. Cyber liability coverage is especially important nowadays due to the rising cases of hacking.
- Business auto insurance- covers the company's automobiles and injuries caused by your vehicles.
- Data compromise coverage- Provides legal liability for victims of data theft. It may also pay for services to provide recovery of personal information that has been compromised.
- Equipment breakdown coverage
- Employment practices liability coverage- Pays for damages that the employer is legally liable for violating an employee's rights. It also pays for the legal fees that may be involved.
- Directors and officers liability insurance coverage- covers for judgment and legal defense costs when there is a lawsuit claiming that the business was managed without proper regard for the rights of others.
- Umbrella policies- The policy provides coverage for costs that are over and above your liability insurance. Umbrella policies protect businesses against high losses when underlying policies have been used up.
Now that you are aware of the various types of insurance, we will look at why a small business requires insurance.
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