Online Businesses Need Insurance Too
As successful as online businesses can get, there’s always an element of risk. Business insurance, also known as commercial insurance, can help protect you from these types of risks and other common ones that many small businesses owners battle. Without this insurance, you could be responsible for paying claims out of pocket.
There’s no one-size-fits-all when it comes to business insurance types, however, it’s considered a smart move to have coverage if you:
- Operate the business from a location that you rent or own
- Possess physical or digital property that can get stolen or damaged, like inventory or customer data
In this post, we’ll dig into a series of coverage options on offer in the digital space and explore what you can do to make sure your online business is covered.
● Product & Public Liability Insurance
Working online means that much of your customer interactions will be virtual, meaning that your public library risk is likely quite low. But that’s not always the case. For businesses that operate in warehouses, for instance, this means that their personnel will have contact with members of the public and could be held responsible for injuries.
Product liability is typically a critical part of online retail insurance and is often sold as part of a public liability insurance policy. There’s also a chance you will be held responsible for the damage or injury caused by the products you sell.
As an online retailer, if someone blames you for the food poisoning after eating one of your, let’s say, personalized cakes, you could be responsible for compensation claims.
● Stock Cover
Another important consideration for small online businesses is the stock cover. There’s a chance that you will keep a fair amount of stock in either your home or in another warehouse before it’s shipped to buyers. If the stock is stolen, damaged, or anything else, then the cheapest small business insurance can cover the costs of replacement, according to the cost price.
Note that the value of your stock is dictated by the goods you possess but can be priceless in other ways. However, losing your stock means the difference between operating or not, and often a disequilibrium in-stock can mean that customers can opt for your competitors and their stock availability. Yet, having it covered will help you manage any losses and resume your trading.
● Employers ‘Liability Insurance
Sole traders need not worry about employer’s liability coverage. However, once they start hiring their first staff member, they will need it. The liability coverage protects online businesses in the event of employee-related issues and can be modified according to the business’s needs. If you end up hiring more than two employees by the end of the year, then you have to make sure you are still covered.
Not an online retailer? You may still want to consider professional indemnity as part of your policy if you offer any sort of professional advice to clients. This type of coverage will protect your online business if ever a customer deems the advice given to them is inadequate.
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