Other online retailer insurance
It's recommended that every online retailer obtain both general liability insurance and product liability insurance, and that may be enough to cover your ecommerce business. However, some ecommerce retailers like to have more protection. Here are some other online retailer insurances that you can consider.
Business property insurance
Business property insurance covers physical assets owned by the business, for example, inventory, equipment, and other assets. If the property you own becomes damaged due to severe weather, accidents, or other hazards, you are covered.
If your ecommerce business sells jewelry, and your supplies are damaged or destroyed in your studio, business property insurance can help you replace them by covering the cost.
Workers' compensation insurance
Workers' compensation insurance only applies if you have hired employees. It doesn't apply if you use contractors. Depending on where you are located, it's likely that the government has requirements regarding workers' compensation insurance.
This type of insurance protects you, your company, and your employees when an employee gets hurt on the job. For example, if your employee is assembling kits to ship out for orders, and they cut themselves on one of the components in the kit, workers' compensation covers all of the medical bills from the accident.
Professional liability insurance
This is not the same as general liability insurance. Professional liability insurance is used when someone claims that your business made a mistake, was negligent, committed a breach of contract, or failed to deliver a project or service by its deadline.
If you are a CPA and make a mistake on someone's tax return, or if you are a sign designer and miss a deadline, your client can sue you. They can claim that your negligence or mistake caused them a decrease in revenue or other damages.
Professional liability insurance covers any legal fees or settlements.
Cybersecurity has become a growing problem causing businesses, organizations, and even governments serious issues stemming from cyberattacks like hacking, ransomware attacks, and data breaches.
Having an ecommerce business means that you are open to cyberattacks. Hacks can be extremely serious, for example, if your ecommerce site is hacked, and the hackers release private customer information like names and addresses, credit card information, or company proprietary information.
Cybersecurity insurance covers costs associated with your cybersecurity like notifying customers of the breach, instituting credit monitoring, and investigating how the incident happened. You may also be covered for costs from risk assessments to prevent future cybersecurity breaches, legal fees, and settlements if you get sued by a third party.
Business interruption insurance
This insurance covers your business in the case of a major disaster like flooding or fire. If your office gets destroyed by a fire, and it affects the ability to fulfill orders, for example, business interruption insurance covers the lost income while you recover and rebuild from the disaster. It also covers essential business expenses you need to pay while your company is down or isn't back to full capacity.
Inland marine insurance
Many ecommerce businesses ship components and finished products and store them at a third-party location or dropshipper. Inland marine insurance covers business property that is in transit or in storage at a third-party location.
Inland marine insurance covers damage or loss of business property from vandalism, theft, severe weather, and disaster events. For example, you are waiting for a delivery of electronic equipment for your warehouse, and the shipper carrying the property is in an automobile crash damaging your equipment. This insurance will help you cover the costs of replacing the equipment.
When purchasing insurance for your ecommerce business, you may find that you can combine several types of insurance into a bundle that is added to your business owner's policy (BOP). This often includes general liability insurance, commercial property insurance, and business interruption insurance, and can be customized to fit your business needs.
Depending on the size of your business, and other factors that are industry-specific or unique to your business, you may find that buying a BOP is the most efficient insurance package for you.