The Best Insurance Options for E-commerce Businesses
Every day, tons of E-commerce businesses are exposed to risk, from card testing fraud to e-commerce stores getting hacked and storage warehouses burning down. In today’s market, where risk is always rising to meet each market opportunity, every business needs to be insured.
But even though running an e-commerce business without insurance is like jumping off a plane without a parachute, many e-commerce companies are still uninsured because their owners don’t know which insurance options are best for them and which insurance companies offer these options.
So, to help you find the best insurance options for your e-commerce business and the companies that offer them, we prepared this quick guide that’d set you on the right path to insuring your business.
When it comes to buying insurance, there’s no one size fits all. For every increase in revenue generated by your business, you need an extra layer of insurance protection. Here are some options to consider.
6 Critical Insurance Options Every Ecommerce Store Needs
Getting the best insurance plan for your business can save you from multiple disasters.
Courtesy: Pexels
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Product Liability Insurance
Product liability is a critical insurance option your e-commerce store needs because it protects your business if a customer sustains an injury from using your products.
Say a customer gets injured by a malfunctioning appliance they bought from your online store. If, after careful consideration, the appliance’s malfunction is your fault, then product liability insurance can help safeguard your company. And if your business is sued, it can also help you pay for the legal fees.
It’s always wise to secure your business with product liability insurance even if it seems like no one would ever get hurt using your products.
There is the famous and curious case of a company called The Furry Gang that made a popular retractable dog collar. One day, her dog lunged and the leash flew back, hitting her eye and permanently blinding it.
The company had to fold to avoid the product liability lawsuit. You don’t want this happening to business so make sure you have enough coverage.
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Cyber Liability Insurance
Your e-commerce store stands a high risk of facing cyber-attacks and fraud targeting your customer’s confidential data. And besides getting your cyber security strategy up to date, the best way to protect your store is by getting cyber liability insurance.
Cyber liability insurance is one of the most important kinds of insurance your online store needs. If your store’s cyber security ever gets breached, this insurance option can help safeguard your e-commerce store from losses caused by a cyber attack. It gives you the financial wherewithal to repair the damages of the attack, the data recovery process, as well as public relations.
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Property Insurance
Product insurance is also a good option if you’re worried your store’s warehouse(s) might burn down, your product might get damaged, or your employees would outright steal from you. Property insurance not only secures your inventory and equipment but would also help you cover the cost of replacing them.
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Transit Insurance
If your e-commerce store has grown to the point where you either get large deliveries from your product’s distributors or send large deliveries to your warehouse, then it needs transit insurance.
Transit insurance helps protect online stores if large batches of their inventory get destroyed while being transported from one location to another.
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Employment Practices Liability Insurance
Employee practices liability insurance would help you protect your store from employee claims of defamation, workplace harassment, wrongful termination, invasion of privacy, and discrimination based on religion, age, and gender.
Although you might not have any workers yet, if your store ever plans to hire or fire, promote or demote, communicate and manage employees anytime in the future, then you’d need to get this insurance plan.
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Workers Compensation Insurance
It doesn’t matter if your e-commerce store has five employees or just one; it needs worker’s compensation insurance. This insurance plan would cover the cost of your employee’s medical expenses and lost earnings your store incurs due to an employee’s work-related accident.
5 Leading Insurance Companies for E-commerce Brands
Knowing the best insurance options for your e-commerce business is great, but you also need to select an insurance company that offers those options. The last thing your business needs is jumping off into the market with a shredded parachute.
So, to help save your business from making a fatal jump here’s a simple list of five solid insurance companies specializing in protecting e-commerce brands from the ever-growing risks in the market.
But if you’re too busy managing your store and you can’t seem to set out time to look through these insurance companies to find the best one for your business, then Insureon and CyberPolicy are the best options for you.
These companies are the leading independent marketplace for the online delivery of insurance to small businesses. Insureon has helped countless store owners quickly compare insurance estimates from top-rated companies, purchase insurance policies, and maintain their coverage online.
Factors that Determines the Cost of Insurance
If you own an online store, you’re probably concerned about increasing productivity, saving money, and growing your business.
And even though these are all important considerations when searching for e-commerce insurance, you also need to understand that several factors can influence the cost of insurance for your online stores.
Some of these factors are:
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The products you sell
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The volume of sales per month
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Value of your store’s inventory
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Shipping location
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The number of employees working with you
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Claims history
Now, if you run an e-commerce business that provides expensive items, say luxury watches or high-end gadgets, then you’d typically need to pay a larger premium. But if your e-commerce business deals on inexpensive items, you can expect your insurance to cost around $50 to $100 per month.
