The Internet has made many things possible, and one of these is running a business from the comfort of your home. For many, the dream of becoming one’s own boss is now a reality, but that doesn’t mean you don’t need comprehensive commercial insurance. While some of your insurance needs are the same as those of a regular storefront, you also face different risks that standard insurance policies might not address.
The majority of businesses today obtain insurance coverage through a Business Owner’s Policy (BOP), which lumps several different types of policies into one plan. Luckily, this can be tailored to meet your needs; but exactly what kind of insurance does an e-commerce business need?
First, you’ll still need to invest in standard policies such as:
Property insurance: Just because you aren’t operating a physical business doesn’t mean you don’t need property protection. What if your headquarters/home were to catch on fire? This type of insurance would help pay for repairs, but it can also help cover computer issues and data loss.
Liability insurance: If someone tries to sue you, whether it’s from data loss or libel, liability insurance will help pay for defense costs as well as for settlements against you. It’s extremely important to set the appropriate limits for this coverage, as lawsuits can sometimes climb into the millions of dollars.
Workers compensation: If you have one or more employees, it’s likely required by your state that you offer them workers compensation. If someone is injured while at work, this benefit pays his or her medical expenses and protects you from being sued. Make sure you check with your state board to ensure your policy meets the law’s standards.
Then there are other less common forms of insurance you should consider, including:
Intellectual property insurance: A form of liability insurance, this coverage protects you in case you’re sued for copyright infringement. Even if you’re certain your idea or trademark is 100 percent original, many claimants simply take businesses to court because they know those companies don’t have the money to pay for a court case.
Transportation insurance: Many e-commerce businesses are retail based and rely on second-party shipping and handling to transport goods. Although many shipping facilities have insurance policies of their own, you need to be sure your goods are covered. This policy helps you recover from losses resulting from a failed shipment.
Business interruption insurance: While it’s true the Internet never sleeps, there’s always a chance that a glitch could knock you offline for days, whether it’s a natural disaster or a third-party problem. If it’s a long enough interruption, you could suffer profit losses. This type of policy can help you recover once you’re back online.
It’s important to connect with your insurance agent when searching for e-commerce insurance products. Data and Internet security is a top priority, and malware isn’t the only threat lurking around the Internet. Like the Internet, insurance has no physical presence, but when you need it, it’s there.