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When you run an online business, you do not know what might be around the corner. Whilst you set out for success, there will likely be hurdles along the way. Online retailers like you take risks in the day-to-day running of an online business. As such, it is essential to ensure your eCommerce business is properly insured. Traditional eCommerce Insurance can cover costs you, as a business owner, do not account for in your online business budget. One type of business insurance for an eCommerce brand is public liability insurance. This article will explain what you need to know about public liability insurance for your UK eCommerce business.
What Is Public Liability Insurance?
Public liability insurance protects businesses, including eCommerce businesses, against a member of the public claiming personal injury due or a claim for property damage against your business. This is where your business, through its business activities, is at fault. Public liability insurance can cover costs from £1 million to £10 million. It does not matter the legal status of your online business as public liability insurance is suitable for:
- sole traders;
- partnerships;
- limited liability companies.
It is simple to take out public liability insurance as you can do this online through insurance websites. Alternatively, if you think the policy for your eCommerce business will need to be a large one, you may choose to use an insurance broker.
When you take out public liability insurance, read it carefully. This will ensure your eCommerce business is aware of any exclusions and endorsements in the insurance policy.
Why Should You Take Out Public Liability Insurance?
Personal liability insurance is not a legal requirement for your eCommerce business. You may, therefore, wonder why it is so important to take out cover for your online brand. Public liability insurance is an important type of insurance as it offers your company the comfort of knowing you have protection if you know your brand has contact with members of the public.
For example, despite being an online business without a physical shop, you may have an office. A business which you purchase supplies from may attend it for a meeting or your couriers may attend to collect and deliver your eCommerce products to customers. Various scenarios could arise if you had not anticipated where public liability insurance could cover you. For example, the
- person attending the meeting incurs damage to their laptop whilst in your office because a member of your staff knocks it; or
- the courier picking up goods to deliver slips on a drink someone in your business spilt and breaks their ankle, and you had not made it clear the floor was slippery.
To help you assess whether public liability insurance is necessary for our online business, there are vital areas to think about. For example:
- the frequency with which members of the public visit your eCommerce business;
- whether your business premises hold dangerous substances or materials;’
- are there common types of accidents that occur at your business premises which could impact a member of the public?; and
- the types of members of the public who may visit your online brand in terms of their vulnerability.
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Critical Aspects of Public Liability Insurance
There are several points to note about public liability insurance, which you may not immediately be aware of or may assume differently. We have cited some of these here to help you:
- members of the public include businesses that are contractors for your eCommerce brand;
- public liability insurance does not only pay the costs of the personal injury or property claim but also the legal fees for your online brand;
- your employees are not protected against personal injury by your public liability insurance but instead by employers’ liability insurance; and
- public liability insurance will not cover costs for mistakes you make to client’s work resulting in a loss to their business, but instead, professional indemnity insurance covers this.
This checklist will help you identify areas in your business that may need further protection or assistance to ensure you are legally compliant.
Key Takeaways
Public liability insurance is crucial for eCommerce businesses that interact with the public. It protects against the risk of personal injury or property damage a member of the public may sustain as a result of your business activities. This article has explained what you, as an online business, need to know about public liability insurance. It begins by explaining what public liability insurance is and why your online brand may need it. For example, if you have clients attending your business who incur damage to their property, such as damage to their laptop. The article also explains some key points to note about public liability insurance you may not be aware of.
If you need help understanding why your eCommerce business may need public liability insurance, contact our experienced eCommerce lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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