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How Do You Insure Your Online Business?

With access to increasingly intuitive and innovative tools, the online business market has taken a turn in recent years. The advancement of marketplaces associated with new habits and needs accelerated by the pandemic, brought online businesses, especially e-commerces, into the spotlight.

Whether that’s your main business or just an addition to a physical store, your company’s online presence matters. To protect your e-commerce business from potential lawsuits, accidents and disasters, you will likely need some business insurance. Have you ever considered it?

Running an online business can leave you open to unique risks. Appropriate, custom-tailored business insurance can help protect you against the many risks that small business owners face. Or do you want to bet that nothing will go wrong out of your own pocket?

Does my online business need insurance?

To answer this question, you must consider the specifics of your business and, of course, the risks involved. It’s a good idea to have coverage if you:

  • Operate your online business from a physical location that you own or rent
  • Have digital or physical property that could be stolen or damaged, such as your customer data or inventory

Do you have property to look after? Are you responsible for third-party information? It can be a good idea to ensure the security of what is in your possession, whether it is physical or remote.

Why does an online business need insurance?

While running an online business may not include the risks that traditional businesses face, such as accidents across a wet floor or physical damage to a storefront, your online business is not without its risks.

An online business is no longer just a website, right? Your business also has social networks, email, and other platforms that allow you to gather communication, store documents, share data, sign contracts and a lot of other functions that allow your business to be increasingly connected and, consequently, exposed.

Business insurance can help if:

  • Someone hacks your online business’s payment system and gets your customers’ credit card information
  • A photographer or designer sues your company for copyright infringement for using an image without permission
  • A customer sues you for breach of contract
  • Someone sues you for false advertising
  • An employee responds to a customer in a defamatory manner
  • You are unable to fulfill orders due to a supplier or supply chain issue.
  • Your company is sued because of a failure to deliver a product or service

The situations are different. Most online businesses should have at least General Liability and Product Liability Insurance to protect themselves from the most common risks. Some marketplaces that host smaller e-commerce sites, such as Amazon, may require proof of commercial insurance in order to authorize your space to be created on their website.

What insurance do online businesses need?

Protecting your business from the greatest number of risk possibilities is always ideal, but it is important to understand what your company’s needs are in order to avoid covering too much or not enough.

Learn more about the insurance coverages you can get to protect your online business:

Business Owner Policy 

The Business Owner Policy is insurance used by many small businesses and is a good starting point for insuring your business. With a BOP, your online business has:

  • General Liability, which helps protect against personal injury or property damage claims.
  • Commercial Property, which protects the physical structure, equipment or tools owned or rented that your company uses.
  • Business Income, which can cover your lost income if you are unable to operate due to a covered loss such as property damage.

Data Breach Insurance

Data Breach Insurance combined with Cyber Liability Insurance can save your online business if you lose your customers’ confidential information.

This coverage helps your business respond to a data breach and can help cover your costs for:

  • Notifying affected customers
  • Offering credit monitoring services
  • Improving your business reputation

Product Liability 

Product Liability Insurance protects your business if something you sell online harms someone or damages your customer’s property.

Professional Liability

If a client believes that you or someone at your company made a mistake while providing a professional service, Professional Liability coverage is the coverage that protects you. Professional Liability Insurance can help pay your fees and legal costs in this situation.

Workers’ Compensation

If you have employees, you are required to have Workers’ Compensation in most US states. But where not mandatory, this insurance provides benefits to your employees if they suffer a work-related injury or illness, which is your responsibility with or without insurance.

Check the Workers’ Compensation laws in your state and understand the risks in your area and what your obligations are to your employees.

You can learn much more about Workers’ Compensation by clicking here.

Commercial Auto Insurance

If you use your car for deliveries or any other business-related activity, you need commercial vehicle insurance. There are several situations and exclusions in your personal auto insurance that can let you down if you don’t turn this insurance into a commercial one.

Read this article to better understand why it is not a good idea to use your personal auto insurance for the car that serves your business.

Inland Marine

If you need to transport and store goods, Inland Marine Insurance protects your commercial property while in transit or while it is stored at a third party location.

It covers damages resulting from theft, vandalism, as well as certain hazards and weather events.

How much does online business insurance cost?

The cost of your insurance depends on several factors, such as:

  • Number of policies you need
  • Coverage extensions and limits of your policy
  • Place of business
  • Products or services you offer
  • Number of employees you have
  • Your business assets
  • Prior incidents

Companies with higher risks need more coverage and therefore pay higher insurance rates. However, a small Home-Based business with limited customer traffic is likely to have low costs.

Get a quote

If you want to know the cost of all the coverage you need for your company, don’t be shy. Get a quote today! It’s free, online and has no strings attached.

If you are still in doubt about what you need or want to know more about insurance for your type of business, talk to a BRZ agent and receive all the necessary guidance to have the best quote on the market in hand.

Luciana Sá

Know our Business Insurance

Get a quote!

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