Like any business owner, online sellers face challenges such as data breaches, inventory theft and lost income if you can’t open your business for a reason such as a fire. E-commerce insurance is a type of small business insurance that covers the kinds of problems your industry faces.
Here are some types of e-commerce insurance to consider.
Business Interruption Insurance
Business interruption insurance—also known as business income insurance—covers your e-commerce business when it can’t open due to an event covered by the policy, such as a fire or storm damage. This coverage reimburses the business for lost income and also pays for relocation costs if you need to temporarily move your e-commerce business to a new location.
Business Property Insurance
Business property insurance covers your business property if it is stolen, damaged or destroyed due to a problem covered by your policy, such as a fire. This includes assets like your business premises, machinery, tools, inventory, computers, office furnishings and essential documents.
Business property insurance is also known as commercial property insurance.
Commercial Auto Insurance
If you use a vehicle such as a car, truck or van for business, you likely need a commercial auto insurance policy. For example, driving your products to the post office for delivery is considered business use. Your personal car insurance policy won’t cover accidents that happen while you’re using your car for work purposes.
Cyber Liability Insurance
Cyber liability insurance typically covers a business for cyber threats and data breaches. It covers costs such as data recovery, identity recovery and investigative services. This coverage is also known as “cyber risk insurance.” It’s a good choice if your e-commerce business collects sensitive information such as Social Security numbers, credit card numbers, bank account numbers and driver’s license information.
General Liability Insurance
General liability insurance covers your e-commerce business for accidental injuries and property damage to others. It also covers lawsuits for reputational harm, copyright infringement and advertising injury.
For example, if another business sues your business for defaming it in an ad, the general liability portion of a business insurance policy will cover your legal costs.
Professional Liability Insurance
Professional liability insurance covers claims of mistakes and errors made by your e-commerce business, even if the claim has no merit. For example, if a customer claims that your e-commerce business failed to deliver a product on time and led to a financial loss, your professional liability insurance will cover your legal costs.
Professional liability insurance is also known as errors and omissions insurance.
Product Liability Insurance
Product liability insurance covers your e-commerce business if a product you created, manufactured or sold doesn’t work properly and causes property damage or bodily injury to someone else, even if the customer uses a product incorrectly.
For example, if your e-commerce business sells a defective product that results in an injury to a customer, your product liability insurance will cover their medical bills and your legal costs.
Workers’ Compensation Insurance
Workers compensation insurance covers employees who are hurt or become sick because of their jobs. It pays for expenses such as lost income, medical bills and physical therapy. Most states require businesses to have this insurance, even if they only have one employee.
