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What Types of Insurance Does My eCommerce Business Need?

Table of Contents

In Short

  • Tailored packages cover risks like cyber-attacks, property damage, and supply chain issues.
  • Include public and product liability insurance for customer claims and contents insurance for stock and goods in transit.
  • Insurance protects against financial losses, ensuring your business can recover from unexpected setbacks.

Tips for Businesses

Protect your eCommerce business by investing in insurance that suits your needs. Consider product liability, public liability, and contents insurance to cover potential risks like stock loss, customer injury claims, or cyber-attacks. Review policies carefully and ensure adequate coverage for all business assets, including goods in transit.

You may be an eCommerce business, but as a business selling online, you still need to get business insurance. Online retailer insurance is essential as it protects your business against risks. Every business owner invests time and money into their business, so you do not want to lose out when things go wrong. No one can tell what the future holds, so having insurance means you have a safety net where your things for your online business do not turn out as expected, such as if you experience property damage. Insurance can also cover you when you are legally liable for something. This article will explain what types of insurance products you should take out if you run an eCommerce business. 

1. eCommerce Business Insurance   

When you take out eCommerce insurance for your online business, it can cover you for various eventualities. Often, insurance providers tailor-make your insurance package to cover specific events that are risky for your business type. 

For example, your eCommerce insurance package may include:

  • public and product liability insurance; and
  • cyber and data risks insurance.

There are many reasons why you should take out eCommerce business insurance. For instance, your eCommerce business faces many risks. If your online business does not have eCommerce business insurance, you may not be able to afford to fix or remedy any issues that may subsequently arise. Your eCommerce business may experience problems and risks such as:

  • supply chain issues;
  • technology failing;
  • cyber-attacks;
  • stolen stock;
  • a fire that destroys your stock to sell online in your warehouse; or
  • a flood that causes damage. 

2. Contents Insurance Cover

A business insurance cover that your eCommerce business will likely need is contents insurance cover. Contents insurance cover, in essence, protects your business’s assets. If your eCommerce business has this insurance cover: 

  • any contents you may have in your business premises where you base your eCommerce business, such as an office, will be protected;
  • loss of any online stock will be covered; and 
  • goods in transit for shipping your online products to your eCommerce customers will also be covered.
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3. Product Liability Insurance 

You are responsible if your products cause injury or damage to another person, such as your online customer, which is product liability

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If an eCommerce customer files a claim against your online business, your product liability insurance should cover the amount that needs to be paid.  

4. Public Liability Insurance 

It is also prudent for you to take out public liability insurance. Public liability insurance safeguards your business against personal injury or property damage claims made by several groups. Groups who could make this claim against your eCommerce business include customers or visitors to your eCommerce store. 

For example, suppose your eCommerce website was hacked, and a visitor, not a customer, was also hacked, and their personal information was stolen. Your public liability insurance would likely cover any subsequent payout this visitor requested.

Key Takeaways

As an eCommerce business owner, you should take out the insurance products that suit your online business. eCommerce business insurance will likely be beneficial for your online business. If your online business has this insurance, you are likely covered for any cyber security or data privacy issues that may occur in the future. On a similar note, contents insurance coverage is also helpful. This insurance product covers you for any damage that may occur to your online business’s assets.

Product liability insurance is also beneficial for your eCommerce business. Your product may inadvertently cause injury to the customer or in some way damage your customer’s property. In such an event, you would be covered for any amount that would need to be subsequently paid out. Public liability insurance is also essential for your eCommerce business. This insurance product is beneficial when a member of the public visits your website and is harmed in some manner.

If you need help understanding what insurance products your eCommerce business requires, 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.  

Frequently Asked Questions

Is it mandatory to register my eCommerce business with HMRC?

Every new UK business must register with HMRC, regardless of whether it operates from a physical location or online only. 

Does a VAT number need to be on our website?

You are legally obligated to display any VAT registration number on your website. 

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Clare Farmer

Clare Farmer

Clare has a postgraduate diploma in law and writes on a range of subjects and in a variety of genres. Clare has worked for the UK central government in policy and communication roles. She has also run her own businesses where she founded a magazine and was editor-in-chief. She is currently studying part-time towards a PhD predominantly in international public law.

Qualifications: PhD, Human Rights Law (underway), University of Bedfordshire, Post graduate diploma, Law, Middlesex University.

Read all articles by Clare

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