eCommerce Insurance: 6 Types of Protection You Should Have
Generally speaking, every entrepreneur should make protecting their business a high priority. For online sellers, this holds true to you as well. In order to run a smooth online business, it’s imperative that you have the resources needed to ensure your store’s long-term survival.
Whether you’re a one-man show or you own a larger company with a warehouse of inventory, having insurance for your online business can help protect your assets by covering costs when things go wrong.
Online sellers are prone to a wide variety of risks and challenges such as fraud, theft, damaged products that could cause injuries, and much more. However, with the right insurance, you can prevent your eCommerce business from unforeseen situations and additional consequences.
To help, we’ve outlined the different types of eCommerce insurance you should have and reasons why you should be carrying them.
What Type of Insurance Should eCommerce Sellers Carry?
There is no eCommerce insurance that is considered best, but there are a few insurance types that you should definitely consider. Let’s dive in…
- Employer’s liability insurance – One of the first types of insurance eCommerce businesses should have is employer’s liability insurance, which serves as a core protection for your business. For example, if you’re running a warehouse, it’s important that you are liable for your employees in the case that they injure themselves while on the job. Remember, no matter what your business is, any company with employees can face the risk of allegations, breach of contract, etc.
- Product liability insurance – No matter what you sell, you’re always going to be faced with the risk of one of your products being damaged or defective, potentially harming your customers. Should your customers experience any sort of injury or illness as a result of a product they purchased from your online store, eCommerce product liability insurance can provide you with protection and help you avoid legal battles. Remember, accidents do happen, regardless of the type of product you sell, so it’s vital to carry product liability insurance. This is also true if you’re working with a manufacturer, i.e., you’re selling a white label product, in which case you’re still liable, as it’s being sold in your store.
- Cyber liability insurance – The internet can be a scary place, filled with hackers who are ready to grab any information they can. As the web is filled with bad actors, phishing scams and data breaches, eCommerce businesses are typically big targets for stealing consumer data. In fact, eCommerce accounts for 32% of all cyberattacks and with cyber liability insurance, you’ll be protected from hackers stealing your customers’ data that could be then used and abused.
- Transit and logistics liability insurance – If you manage cargo, delivery and inventory, and are using a third-party logistics company to help move inventory from one warehouse to another, you’ll definitely need transit and logistics liability. Companies that move these goods by ocean, air and land can face the risk of theft, damaged goods and other liabilities. Having insurance will prevent a major disaster from impacting your business so it’s incredibly valuable and important to have.
- Business interruption insurance – We’ve seen in the past year how supply management was easily disrupted by the COVID-19 pandemic, which caused many warehouses to shut down, resulting in the loss of cash for online sellers. With business interruption insurance, you can make sure that no matter what disaster causes your warehouse to shut down, you’ll still be able to receive some sort of cash flow in order to run your business.
- Payment fraud insurance – A common challenge that online sellers face is preventing payment fraud, which actually occurs quite often and can really harm your business. With the increasing volumes of online trade, payment fraud insurance is designed to help support issues with charge back fraud and help eCommerce sellers prevent these issues from happening.
Get Protected Today
After all that’s been said, one thing to remind yourself is that your eCommerce business is one of the most important assets you own, so why not protect it with the right insurance? Whether you’re an eCommerce veteran or just starting out, protecting your employees and inventory from unanticipated scenarios is vital to your business’s success. While at first it may seem a bit tedious or even feel like an unnecessary cost, you can literally save millions in costs if and when something happens.
What are you waiting for? Get the protection your online business needs now!
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