Do I Need Insurance for My Online Business?

As a small business owner, you likely wear many hats. You're the accountant, marketer, salesperson and more. When it comes to your business, you likely want to do everything you can to protect it - including getting insurance. In today's digital age, more and more businesses are moving online. This can be a great way to reach a larger audience and grow your business, but it also comes with some unique risks. Do you need insurance for your online business? The answer may not be black and white, but here's what you need to know about protecting your business online.

What Risks Do I Face With an Online / Ecommerce Business? 

It may seem like having an online business removes most of the risk of having a brick and mortar business such as bodily injury to customers or property damage to the actual building itself, but there still are plenty of risks that you want to avoid. There are several ways that your business can be comprised:

• Someone hacks your online business’ POS and takes important information related to your customers' payment methods.
• An artist sues your business for copyright infringement for using their design without the correct permissions.
• A client of your online marketing business files a lawsuit against your business for breach of contract.

These are just a few of the risks you may encounter with your online business. In this blog, we will examine the different types of insurance you should carry to avoid these, and several other risks for your online business.

Cyber Liability

Cyber Liability insurance is an important business tool to help protect your company from financial losses resulting from data breaches and other cyber events such as hacks. First-party coverage applies to the costs incurred by you directly as they relate back towards any damages sustained during this type of incident; while Third Party covers claims against firms who have been injured through their actions or lack thereof in response timeframes related with these types of situations.

Cyber Liability insurance helps networks stay financially stable when facing a data breach or hack on your system. If a hacker steals the credit card information of customers from your online store, this coverage would cover the cost of investigating the situation, notifying the customers, and improving your overall reputation after the incident. 

General Liability

General Liability coverage provides protection against claims for bodily injury and property damage arising out of premises, operations, products or completed work. The policy is helpful especially for ecommerce businesses dealing with products shipped to consumers. If the products malfunction or are defected and cause any injury or damages, this policy will help cover the increased risk. 

Let's say you have an online store that sells vitamins. If you accidentally sell a vitamin that contains an ingredient not labeled on the bottle and a client has an allergic reaction, legal action may be taken against you. A General Liability policy helps protect against this case.

Workers’ Compensation

Workers’ Compensation is an insurance policy providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue their employer for the tort of negligence.

If there is an accident at your distribution center and a box falls and injures one of your employees, causing them to miss work, Workers’ Compensation coverage will not only help pay for their medical bills, but also reimburses their salary for the time they are missing. This type of coverage can save a company from having to pay for medical bills and missed wages. 

Professional Liability 

Professional Liability insurance is a type of insurance that protects traditional professionals such as accountants and attorneys from liability incurred due to errors or omissions in performing their services. Quasi-professionals (e.g., real estate brokers) also fall under this category. This policy will help provide peace-of-mind when dealing with clients who may try seeking legal remedies against them if something goes wrong during the contracted time period. 

If you own an online marketing business and a campaign was implemented outside of the agreed terms in the contract and is responsible for a hefty decrease in sales, the client may seek legal action for damages. A Professional Liability policy would help protect you in this case and cover legal fees. 

Commercial Property 

Commercial Property is a type of insurance that protects your business from the damage caused by fires, storms and other events. It can also be used to cover you if there are any structural damages or work done on parts inside an office building. A Commercial Property Policy will include coverage for the contents in a building damaged as well. 

Even though your business is run online, you may have physical locations that help make your business happen. Warehouses, distribution centers, and more are integral parts of online businesses and would be protected from the various risks they are prone to. 

Commercial Auto

Commercial Auto insurance is the best way to protect your company's vehicles, including cars and trucks used for business. It provides liability protection as well as physical damage coverage so your investment stays safe no matter how much risk there may be during an activity that takes place outside of work!

If you offer delivery services for your business online and are often driving your car to fulfill orders, a Commercial Auto policy would help prevent any risks that are faced while driving. 

Find the Right Coverages For You!

Do you need insurance for your online business? The answer to this question is yes. That's right, even if you don't have a brick and mortar store or traditional office space, it's essential that you've got some sort of protection against the costs associated with running an online business. We know what it means to be in the trenches - especially when your livelihood depends on having access to technology 24/7. It can also get tough making sure everything runs smoothly while trying not to skimp on quality customer service at all hours of day and night!

If this sounds familiar then contact one of our partnered agents today so they can help identify how much coverage will suit your needs best.