Many businesses dealing in e-commerce or online selling are unsure about what types of commercial insurance they need. Sure, a brick-and-mortar shop needs coverage to protect their products from fire and theft. Liability coverage even makes sense — what if someone slipped and fell in a coffee shop, then sued the owner for damages?
But when we’re talking about the Internet, does an e-commerce business actually have any real risks?
As it turns out, yes.
Just like brick-and-mortar shops, all online businesses require some sort of insurance to protect their products, employees, and finances. Below, we’ve outlined the main types of insurance for e-commerce your business should have — and what each type will do to provide protection for your assets.
How to Protect Your Business With Insurance for E-Commerce
General Liability Insurance
Even Internet-only businesses and those that are home-based need general liability insurance. Accidents can happen anywhere, any time, and in a myriad of ways. And if your products, services, or employees cause property damage or bodily injury to a third party, you could be sued. Having a comprehensive general liability insurance policy on your side in a situation like this will provide legal defense as well as damage payouts (when necessary) to protect your business’ assets.
Product Liability Insurance
Part of general liability insurance is product liability insurance. But having a unique product liability insurance policy will provide more coverage for your business — especially in a situation where your products cost a lot to produce and/or could cause serious harm in the event of a malfunction. Your insurance agent will help you decide whether your industry and business requires this type of insurance.
Professional Liability Insurance
Professional liability insurance is also called errors and omissions insurance. It is typically for businesses that operate by selling some sort of service, and it protects you from lawsuits that may relate to how you performed these services — if they caused problems for your buyer. For example, professional liability insurance will cover defense and damages in the event that you accidentally made a mistake or omission in your services that then caused business problems for your buyer.
Workers’ Comp Insurance
If your business has employees (even just one!), workers’ compensation insurance or “workers’ comp” may be required by law. This type of insurance provides payments for lost wages and medical bills in the event that an employee is injured on the job. Check with your state laws to see whether or not your business legally requires workers’ comp. These laws vary based on state and industry type.
Keep in mind, however, that even if workers’ comp insurance isn’t required for your state, you should still consider it as it provides important protection for you, the employer, in the event of an employee accident.
Commercial Auto Insurance
Do you have delivery trucks or cars that are used primarily for business purposes? Commercial auto insurance will protect these vehicles in the event of an accident, theft, or other damage. Additionally, if your employees drive their own vehicles in some capacity for their work, you might consider non-owned auto liability insurance to protect your assets in the event that an accident, theft, or other damage occurs while they’re using their vehicles for your business. This is especially important if the driver/employee doesn’t have insurance or is underinsured.
Choosing Insurance Policies for Your E-Commerce Business
Whether you’re a thriving small online business or a startup working out of your garage, don’t allow your business to go without insurance protection. Many insurance agencies cater particularly to commercial ventures — including online-based, e-commerce businesses like yours.
Speak with an agent today to learn more about your options and ensure that all of your bases are covered when it comes to providing optimal protection for your e-commerce business.