It’s easier than ever to start an online store — whether you’re selling handcrafted items on a site like Etsy, creating a web storefront to provide more options to your customers, or launching your own e-commerce empire. With online platforms like Shopify or Wix, you can have your online store up and running in no time. E-commerce platforms make it easy to reach customers almost anywhere.
But it’s important to remember that an online business is still a business, and there are risks involved anytime you’re selling items to anyone. The right business insurance coverage can protect you and your business if something goes wrong.
Before you take the plunge and launch your online store, you’ll want to learn how business insurance fits into the checklist of what you need to run a successful business. Let’s get started with some of the most common questions business owners ask.
Am I Required to Have Business Insurance?
If you have employees, you’ll likely have to carry workers’ compensation insurance, as well as unemployment and disability insurance for your state. But most e-commerce sites like Shopify or Etsy will not require you to carry business liability insurance.
Even So, Do I Need Liability Insurance?
We recommend insurance coverage to protect you and your business from liability issues that are involved in running a business, even if you don’t have a brick-and-mortar location. Running an online store without insurance coverage can result in losses that can close your business as quickly as it opened.
What Are Some Common Risks That Online Store Owners Face?
Any business owner is at risk from being sued by an irate or unhappy customer. Some of the most common risks involved in selling anything — services or products — online include:
- Property damage
- Customer injuries
- Illness caused by your product
- Flaws in design or manufacturing
- Data breaches
How Do I Know What Type of Insurance I Need?
Your coverage needs may vary depending on the type of products or services you’re planning to sell. But insurance coverage can be tailored to the specific needs of your online store or industry niche.
Most commercial insurance carriers offer the typical kinds of policies that online store owners need:
- General liability: This protects you from customers or other third parties that may decide to sue your business.
- Cyber liability: If you store sensitive customer data, whether online or on a computer, you should consider purchasing cyber liability coverage. Millions of sensitive customer records are exposed to cybercrime and data breaches each year, resulting in significant losses. Even small businesses are vulnerable to hackers and cyberattacks.
- Product liability: This protects you if a customer is injured or sickened by your product.
- Professional liability: This can cover risks such as product errors, copyright infringement (even if unintentional), or errors in designing or delivering a product.
There are additional coverages you may want to consider. For example, you might need to protect your equipment such as computers, tools, supplies, or inventory. There may be other insurance needs if you ship internationally.
How Do I Find the Best or Most Appropriate Insurance Coverage?
We understand that figuring out your insurance needs may be overwhelming. This is where an independent insurance agent can help. Because an independent agent provides coverage for a variety of businesses and industries, they can work with you to learn the details of how your business operates, what products or services it sells, and what types of coverage are right for you. And because your independent agent works with multiple insurance carriers, they can shop for the best combination of products to suit your business — even for the smallest niches or specialty boutiques.
Your agent can also guide you going forward, as your insurance needs may change once your business starts to grow and flourish.
Get started with your TrustedChoice.com agent today to find out what coverages and policies will work best for your online venture. And then you can get back to running the business of your dreams.