E Commerce Insurance and Running an Online Business

Today, in our technology-based society, millions of businesses buy and sell products online, offering everything from wholesale apparel to electronics and expensive gadgets, and have found that consumers like the ease associated with shopping via the Internet. An e-commerce business faces very different risks than that of a brick-and-mortar company and, as such, need an e commerce insurance policy designed to address these particular concerns.

As most small business owners know, a standard business owner’s policy (BOP) will cover most risks associated with many companies. This policy combines property coverage with general liability, so that if someone slips and falls while shopping at a store, the liability portion helps pay for medical expenses, while damage from a heavy storm will be covered by the property insurance. An e-commerce business will require more comprehensive coverage than the standard BOP policy will provide, since it will likely only cover a small portion of risks.

Data security and business interruption are also key concerns

An e-commerce business presents unique challenges that e commerce insurance can help address. But, in addition to this policy, there are two key areas that Internet businesses need to focus on – data security, since an online business often keeps sensitive customer data and valuable business information on a secure database where breaches can occur; and the other is business interruption, as they are likely to rely on other third-party providers to assist with functions like shipping or Internet service.

Risk management is an essential tool needed to prevent a breach, but preparations must be in order to deal with the aftermath if information does become exposed. After all, owners will likely be held liable for each customer’s information that is compromised due to the breach. And what would be the fallout if a third-party provider experiences an issue that brings business to a halt? Any prolonged problem could have serious consequences, including a loss or reduction in profits. Business interruption insurance helps to recuperate any losses.

Running an online business reduces many insurance needs and concerns, but those that do exist need to be properly insured or the business is likely to fail. Speak to an agent about e commerce insurance and other important coverages that, by not having, you could be greatly endangering your business.