Most Americans have Internet access, and many are constantly connected to the online world through portable devices, such as smartphones and tablets. Convenience is key in today’s world. And what could be more convenient than shopping online and having your items delivered right to your doorstep? It is little wonder that this is a fast growing industry in the United States. If you own a retail establishment that makes its sales solely through the Internet, you will want to be sure to protect your investment with a sound online store insurance portfolio.
Online Store Industry Facts From Adobe CMO
- Online shopping retail sales are expected to grow steadily from $231 billion in 2012 to $370 billion in 2017.
- Online retail revenue had an 11% year-over-year growth rate for the first quarter of 2014.
- Overall satisfaction with online shopping in the U.S. is high at 83%.
Your Online Store Needs Sufficient Property Damage Coverage
If you own an online store, you likely have a large inventory that you ship from a warehouse. You will need to keep this supply of merchandise insured from the time you receive it until the time it has been delivered to your customers. To do this, you will need the appropriate insurance coverage.
- Building coverage: If you own your warehouses, you will need to insure them with building coverage. This insurance provides compensation for loss or damage to the structure of your building as the result of a covered event. If you have mortgaged the warehouse, this coverage will likely be required by your lender.
- Contents coverage: You can cover the property kept inside your warehouse with contents coverage, which provides you with compensation in the event that a disaster, such as a fire, causes damage to it. This property coverage may cover your inventory as well as your shelving, shipping supplies and other business property. Keep in mind that commercial insurance policies typically exclude mobile equipment, such as forklifts. However, it is possible that your insurance company will be willing to include these items as part of your contents coverage. If so, your insurance agent will need to obtain a clarification endorsement that states that these particular items will be covered.
- Transportation coverage: Once your goods leave the warehouse, they are no longer included in your contents coverage but you are still responsible for them until they arrive at their destination. If they are high value items, you may want to purchase transport coverage, which is part of inland marine insurance. Your insurance agent can help you secure this coverage.
Protect Your Online Store From Liability Lawsuits
Liability lawsuits can be quite costly. Even if your business is not found to have been negligent, the accrued legal defense fees can add up quickly. This is why your commercial insurance policy will include liability insurance, which provides compensation for court costs, legal fees and financial damages if your online store faces a liability charge.
- Premises liability insurance: Because online stores do not have a retail space where people come to shop, there is very little risk of members of the public suffering injuries while visiting your business. However, premises liability may be of value in the event that service workers, delivery people or other visitors to your warehouse happen to be injured due to hazardous or poorly maintained spaces at your establishment.
- Product liability insurance: Your business probably does not manufacture the products you are selling. Nevertheless, if a product defect causes injuries or illnesses to the public, your online store may be among the defendants listed in a liability lawsuit. You can obtain coverage against this risk with product liability insurance. Your insurance agent can help you determine whether this coverage is right for your particular online store.
- Cyber liability insurance: If criminals hack your online store, they may be able to access customer data including credit card numbers and personal information. If this happens, your company may responsible for providing your customers with credit monitoring programs and may also be sued by affected banks and credit card companies. Cyber liability insurance is a new insurance coverage type designed to provide coverage for your business in this type of situation.
- Workers' compensation insurance: Finally, your business is responsible for covering the treatment of injuries sustained by your employees. Because there are many ways a worker can be injured in a warehouse environment, workers' compensation insurance is particularly beneficial. This coverage is required in most states. If it is not required where your warehouse is located, it is still highly recommended that you invest in it, as medical costs can often be quite expensive.
What Other Insurance Coverage Do You Need for Your Online Store?
You may want to add other types of policies to your online store insurance portfolio, including the following:
- Business income insurance: This coverage, which is an important aspect of any commercial insurance policy, provides your business with a continuation of income in the event that a major disaster forces you to halt operations while repairs are made. Business income insurance typically lasts until your online store can resume normal operations, up to one year.
- Coverage against major disasters: Commercial insurance policies typically exclude coverage for damage caused by floods and earthquakes. Furthermore, if your warehouse is located in an area that is at high risk for hurricane damage, this disaster may be excluded from your coverage as well. Fortunately, you can supplement your coverage with policies designed specifically to cover these disasters. Your independent insurance agent can help you determine what supplemental coverage you may need and can assist you with obtaining it.
- Health insurance: The Affordable Care Act of 2010 (ACA) requires businesses that have at least 50 full-time employees to provide subsidized healthcare insurance to their full-time employees. If you need it, your independent insurance agent can help you find suitable health insurance at a competitive price.
- Employment practices liability insurance: This insurance protects your business by covering legal defense fees, court costs and financial damages if an employee sues for an illegal business practice, such as discrimination, sexual harassment or wrongful termination.
There are a number of other insurance types available, and some may be a good fit for your particular online store. An independent insurance agent can help you identify your exposures and can recommend the appropriate coverage to protect your business against them.
Get Assistance Building Your Online Store Insurance Policy Portfolio
It does not need to be difficult to purchase the right business insurance coverage for your online store. When you work with an independent agent in the Trusted Choice® network, you will have access to a well-informed professional who can guide you through your coverage options. Because independent agents do not work for any particular insurance company, they are free to shop around for great coverage at competitive rates. They can help you build a portfolio of coverage designed specifically for your business. Find a Trusted Choice agent near you to get more information about online store insurance coverage.