Do You Need Ecommerce Insurance?

If you have an ecommerce website for your business, you may not have realised that you are eligible for e commerce insurance for businesses. It is a less-known type of insurance than regular retailer insurance, however it can be just as crucial for the business. But what is it and why do you need it?

What is insurance for online retailers?

Online insurance for retailers is there to protect a company from physical loss or damage brought about by third parties. It can also protect against claims brought against them, bodily injury and property damage of the consumer. The purpose of e commerce insurance is to ensure that you receive cover if you are unable to trade for whatever reason, for example stock being damaged by a storm or fault.

It is incredibly important to insure every part of the business, and the online sector is no different. It makes sure that if claims are brought against you by the consumer or a third party, you are protected from any damages this may cause to your business.

Who can benefit from insurance for online retailers?

If you have recently hired a website design agency  and launched an online store for your business selling physical goods, then you are entitled to claim for online insurance. This type of insurance however is not suitable if you also have an established store in the real world. It is purely for online retailers. It is crucial that you know that this particular insurance policy is made with the intention of covering only those who operate a legitimate business buying in and selling on products through an online platform.

The whole idea of getting insurance for you business is to make sure that if anything goes wrong such as your stock being damaged unexpectedly, or someone makes an incriminating and false claim against you or your business, it will protect you. However if the blame can be attributed to you, the policy will not cover the damages you incur.

Why do you need online insurance?

It may be fair to say that you think you don’t need insurance if you solely operate online because there isn’t chance of a customer slipping or hurting themselves within your premises or tripping over a sign. However, just because you do not have a physical presence in the retail world does not mean that you don’t need that extra protection for you and your company. If you manufacture your own products to sell especially, it means that insurance is a good idea for you to take out for the business. The reason for this is that you as the manufacturer hold most of the responsibility when it comes to the safety and quality of the product you decide to produce. When you sell these online and they cause injure or harm to the customer, it is you who will have to face the fall. The same applies when you simply sell on a product- although the responsibility you face is not quite as high as the former. If you end up being found liable for causing damage to either a customer’s body or property, you will face heavy payouts in compensation to the consumer. However, if you take out insurance for the company you can have that protective shield for the business meaning you don’t lose all of your assets. Product liability will cover the legal costs and compensation involved when damage occurs, and this can make a huge difference to the security of your business.

Another form of insurance you can look into for your online business is stock damage insurance. This will insure your stock and will protect you against losing all of your investment should you stock be stolen by thieves, damaged in any way or even lost. As long as you cannot be blamed for whatever happened to the stock, you will not lose any of your investment if it does become unsellable.

It can be therefore summarised that even if you do not have a physical store or presence in the retail world as such, it does not mean you are not eligible for the same cover as they are. It also means that you need the cover just as much as any other retailer out there. Make sure to shop around for your options thoroughly, always double check with a lawyer to advise you, and choose the best type of cover you can in order to protect yourself, your employees and your business.

Michael Foote

Michael Foote, founder of Quote Goat, has over 13 years experience working in the finance, insurance and currency sectors, gaining a financial qualification in 2010-2011. LinkedIn Profile

Do You Need Ecommerce Insurance?