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Online Store Insurance Policy Information

Online Store Insurance

Online Store Insurance. As an online ecommerce business, you might think you don't need to purchase insurance; however, this is possibly one of the worst mistakes you can make as a business owner. Sure, you don't have a physical store front, so this does eliminate the possibility of theft or burglary to your store. This does not however eliminate every single threat which is posed to you as a business owner.

So before you forego purchasing an online store insurance policy, consider some of the benefits of having insurance as an ecommerce business owner.

Online store insurance protects your e-commerce business from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked online store insurance questions:

What Is Online Store Insurance?

Online store insurance is a type of insurance that protects e-commerce businesses from losses and damages that may occur during the sale and delivery of products and services through their online platform. This insurance covers a variety of risks such as product liability, cyber attacks, delivery problems, and data breaches.

It helps online businesses protect their assets, cover the costs of legal fees, and compensate customers for any damages incurred during transactions. Online store insurance is essential for any business that operates solely or primarily through an online platform and helps to minimize the financial impact of potential losses or liabilities.

How Much Does Online Store Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small online stores ranges from $27 to $79 per month based on location, types of goods sold, sales and experience.

Why Do Online Stores Need Insurance?

Online stores need insurance to protect themselves from potential risks and liabilities. Some of the reasons include:

Product Liability: Online stores are at risk of being held responsible for any harm or injury caused by their products. Insurance can help protect them against these claims.

Cybersecurity: Online stores store sensitive customer data and financial information, making them vulnerable to cyber attacks. Insurance can help cover the cost of repairing the damage and restoring customer data.

Shipping and Delivery: Online stores need to ensure that their products reach their customers in good condition. Insurance can help cover the cost of replacing damaged or lost items during shipping.

Legal Liabilities: Online stores can be sued for a variety of reasons, such as copyright infringement, breach of contract, or discrimination. Insurance can help cover the cost of legal fees and settlements.

Business Interruption: Natural disasters, power outages, or other unexpected events can cause an online store to shut down temporarily. Insurance can help cover the loss of income during this time.

Having insurance can provide peace of mind and financial security for online store owners and help them to keep their business running smoothly.

What Type Of Insurance Do Online Stores Need?

Online Shopping

A standard business owner's policy (BOP) isn't going to suffice when it comes to ecommerce businesses. Property coverage and general liability are mainly what a BOP policy cover, so with e commerce businesses you don't run the risk of someone slipping and falling in stores, or inventory being damaged by customers playing with it in stores.

This doesn't mean you are immune to risks and threats to your business. So having the proper online store insurance policy in place will protect you from those threats you are prone to running into as a business owner.

When it comes to ecommerce businesses, you need more comprehensive protection - and this is what your specialized online store insurance policy is going to afford you. The two key areas this policy will protect are:

  1. Data Security - Sensitive customer information, addresses, credit card information, and other personal data, all run the risk of being hacked or stolen by identity thieves. As a business owner in the online world, a secure database is critical to online success, and to having customers trust you. The right insurer is going to make sure this is in place.
  2. Business Interruption - You rely on third party companies for internet, supply shipment, inventory checks, and so forth. If these third parties go down for any reason, your insurance policy will protect you in the event your e commerce business is interrupted, as a result of the third parties being interrupted. This will help you recuperate loss due to business stopping or ceasing for any period of time.

Most ecommerce businesses will require supplemental coverage for their online stores, based on items they sell or services they offer. So in choosing your insurer, you have to understand the additional online store insurance they offer. Some additional coverage options include:

  • Transportation coverage if cars or delivery trucks are stolen or inventory lost during transport.
  • Contents coverage if you manufacture items in a warehouse where they are damaged.
  • Workers compensation in the event you still have employees working for you.
  • Product liability if you make, alter, white or private label or directly import your products.

Additionally, you can purchase directors and officers insurance, or intellectual property insurance (for intangible property like software or data).

Knowing which of these additional policy coverage terms you can add to your premium, the cost of additional coverage, and to what extent you are covered as an ecommerce business, are just a few of the factors which will help you determine which insurance premium to purchase, and of course which insurance coverage provider you are going to purchase it through.

What Does Online Store Insurance Cover & Pay For?

Online Store Insurance Claim Form

There are several reasons why online stores may be sued, and insurance can provide protection by helping to cover the costs associated with these lawsuits. Here are some examples:

Product liability: Online stores may be held liable for selling products that are defective or cause harm to customers. This could result in lawsuits filed by injured customers. Product liability insurance can help cover the costs of legal defense and settlements or judgments awarded to the injured parties.
For example, if an online store sells a faulty electronic device that causes injury to a customer, the customer may file a lawsuit against the store. The online store's product liability insurance can help cover the legal costs, such as hiring a lawyer, conducting investigations, and paying for damages or settlements awarded to the injured customer.

Intellectual property infringement: Online stores may be sued for using copyrighted material, trademarks, or other intellectual property without proper authorization. This could include using images, logos, or content that belongs to others without permission. Intellectual property insurance can provide coverage for legal defense and damages in case of infringement claims.
For instance, if an online store uses a copyrighted image in their marketing materials without obtaining proper permission, the copyright owner may file a lawsuit for infringement. The online store's intellectual property insurance can help cover the legal costs and damages associated with the lawsuit.

Privacy and data breaches: Online stores that collect and store customer information may face lawsuits if there is a data breach or privacy violation. This could involve exposing customer data to unauthorized parties, failing to secure customer information, or not complying with data protection regulations. Cyber liability insurance can provide coverage for legal defense, notification costs, and damages related to data breaches and privacy violations.
For example, if an online store's customer database is hacked, resulting in the theft of customer information, affected customers may file a lawsuit against the store for failing to protect their data. The online store's cyber liability insurance can help cover the costs of legal defense, notification to affected customers, and any damages awarded in the lawsuit.

Contract disputes: Online stores may face lawsuits related to contract disputes with suppliers, vendors, or partners. This could involve issues such as breach of contract, failure to deliver goods or services as promised, or disputes over payment terms. Commercial general liability insurance can provide coverage for legal defense and damages related to contract disputes.
For instance, if an online store contracts with a supplier to provide certain products but the supplier fails to deliver as per the agreement, the online store may file a lawsuit for breach of contract. The online store's commercial general liability insurance can help cover the legal costs and damages associated with the lawsuit.

Employment-related claims: Online stores may face lawsuits related to employment practices, such as discrimination, harassment, wrongful termination, or wage disputes. Employment practices liability insurance can provide coverage for legal defense, settlements, or judgments related to these claims.
For example, if an employee of an online store files a lawsuit claiming wrongful termination, the online store's employment practices liability insurance can help cover the costs of legal defense and any damages awarded in the lawsuit.

In conclusion, insurance can protect online stores from the financial risks associated with lawsuits by covering the costs of legal defense, settlements, or judgments. It is important for online stores to carefully review their insurance policies and work with insurance professionals to ensure they have adequate coverage to protect their business against potential lawsuits.

Commercial Insurance And Business Industry Classification

Description for 7371: Computer Programming Services

Division I: Services | Major Group 73: Business Services| Industry Group 737: Computer Programming, Data Processing, And Other Computer Related Services

7371 Computer Programming Services Establishments primarily engaged in providing computer programming services on a contract or fee basis. Establishments of this industry perform a variety of additional services, such as computer software design and analysis; modifications of custom software; and training in the use of custom software.

  • Applications software programming, custom
  • Computer code authors
  • Computer programming services
  • Computer programs or systems software development, custom
  • Computer software systems analysis and design, custom
  • Computer software writers, free-lance
  • Programming services, computer custom
  • Software programming, custom

Online Store Insurance - The Bottom Line

If you've ever purchased any insurance policy or premium in the past, you know that you have to comparison shop if you want to save. And, you know that in comparing, you typically find higher level of coverage, from the most reputable insurance companies, when you take your time to compare coverage options, optional coverage, and the discount rates which are available to you as a customer. The same goes when you are comparing your online store insurance policy and premiums.

Due to the nature of the industry and the fact that there are so many insurers, it would take countless hours or even days to compare insurers and coverage options on your own. If you don't have the time or don't want to compare quotes. This is where a good commercial broker can help you the right insurer, and sufficient coverage for your business, for the lowest price possible.

Additional Resources For Information Technology & Internet Insurance

Learn about small business IT technology insurance policies that help protect IT businesses, consultants & subcontractors from the unique risks that small tech businesses face when they work.

Information Technology And Internet Insurance

The information technology (IT) industry is constantly evolving and adapting to new technologies and trends. It is a critical component of many businesses and organizations, as it helps them to communicate, store data, and operate efficiently. However, the IT industry also faces unique risks and challenges that can lead to financial losses, legal issues, and damage to reputation. This is why it is essential for IT businesses to have commercial insurance to protect their assets and interests.

One of the main risks that IT businesses face is data breaches and cyber attacks. Hackers can gain access to sensitive information stored on a company's servers or systems, leading to data theft, identity theft, and other crimes. Insurance can provide coverage for these types of events, helping IT companies to mitigate the financial and legal consequences.

Another risk that IT businesses face is the possibility of equipment failure or malfunction. This can result in downtime and lost productivity, which can have a significant impact on a company's bottom line. Commercial insurance can help IT businesses to cover the costs of repairs and replacements, as well as any lost revenue or expenses incurred due to the equipment failure.

IT businesses may also face legal issues, such as intellectual property disputes or contract disputes with clients. Insurance can provide coverage for legal fees and damages, helping IT companies to defend their interests and protect their reputation.

Overall, the IT industry needs business insurance to protect against the many risks and challenges it faces. Without adequate coverage, IT businesses may be vulnerable to financial losses and legal issues that could impact their operations and success.

Minimum recommended small business insurance coverage: Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Computer Fraud, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Errors and Omissions Liability, Professional Liability, Umbrella Liability, Hired and Nonowned Auto Liability & Workers Compensation.

Other commercial insurance policies to consider: Building, Earthquake, Flood, Real Property Legal Liability, Forgery, Cyber Liability, Employment-related Practices Liability, Directors and Officers Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.

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