As an online business owner, you spend a lot of time plugged in. But operating your business behind a screen doesn’t necessarily protect you from real-world risks.
That’s where protection with ecommerce business insurance comes in handy.
In this article, we’ll review each of the following benefits of having ecommerce insurance:
- Fulfills Amazon’s insurance requirements for Professional Sellers
- Protects against product liability claims
- Protects against advertising injury claims
- Provides support with legal fees
- Covers what homeowners insurance may not
- Increases customer trust
When you’re more familiar with each of these benefits and how they’ll impact your business, you can feel more confident about finding ecommerce insurance that’s right for you.
6 Major Benefits of Getting an Ecommerce Business Insurance Policy
1. It fulfills Amazon’s insurance requirements for Professional Sellers.
According to sell.amazon.com, if you’re an online retailer with an Amazon professional selling plan (and you make more than $10,000 per month in sales) you’re likely required to have business insurance for your ecommerce business. (1)
Ecommerce business insurance is a bundle of different types of insurance policies, one of which may be general liability insurance.
General liability insurance (also known as commercial business liability insurance) typically covers a business in the event of:
- Product liability
- Third-party accidents
- Third-party property damage
- Advertising injury
- And more
2. It protects against product liability claims.
Despite how much time and effort you put into making and selling your products, it’s possible that they may not function as advertised. In this case, a customer could sue you for product liability.
What is product liability? Put simply, it’s typically when a customer faults the manufacturer or seller for the product not working as advertised or intended.
Business owners can do everything they can to avoid putting their customers in harm’s way, but unfortunately, we’re all human, and accidents happen. Remember, you don’t have to be found at fault to be involved in a lawsuit and have to pay legal fees.
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3. You’re covered in the event of an advertising injury claim.
If another business believes that something you’ve said or done is negatively impacting them, they could potentially sue you for advertising injury.
Fortunately, ecommerce business insurance with a general liability policy covers advertising injury claims in incidents such as:
- Libel/slander
- Copyright infringement
- Alleged stolen ideas
- And more
Advertising injury claims can extend past the platform on which you’re selling your products, like Amazon, Etsy, or eBay. You may be at risk of an advertising injury claim when you advertise your product, whether it’s on the online store, in email campaigns, on social media, or other avenues.
4. Ecommerce business insurance could help support legal costs.
The legal costs we mentioned can be a hassle, especially if after a lawsuit, you’re found not at fault. Imagine spending all that time and effort making your case, and then still owing legal fees.
With ecommerce business insurance, though, your policy can help to cover the cost of legal fees. Besides taking financial stress off you, it also will free up your time and energy to focus on running your business.
5. It can support you where a homeowner’s policy may not.
If you run your online retail business out of your home, you likely enjoy having flexibility between your work and home life, and saving overhead costs.
Did you know that the typical homeowners insurance policy won’t cover your home business if products are stolen or damaged? In this case, the benefits may not outweigh the risks.
Fortunately, an ecommerce insurance policy can help to cover these situations.
Or consider what would happen if an online graphic design company had an expensive computer stolen from their home office. Business insurance could help to cover the cost of a new computer and software so the designer can continue doing their work.
6. Proof of insurance can increase customer trust.
It isn’t easy to maintain trust if a customer has to go through the time and effort of filing a claim — not to mention the money they may spend on legal fees.
Having proof of insurance can help put potential customers at ease. It tells potential buyers that in the off-chance something doesn’t go as planned with their purchase, you’ve taken the step to get the necessary protection. With so many companies competing for business, any step that helps boost your authority is a smart one to take.
Simply Business makes it easy to access your COI via your online account and with your mobile wallet app.
How Do I Get Ecommerce Business Insurance?
You can get a quote for ecommerce business insurance in just 10 minutes online.
As an online business owner, there are risks you may encounter, but by taking the step to get ecommerce business insurance coverage, you can protect your hard work. But it’s a big decision, and we can answer any questions you may have.
Call one of Simply Business’s licensed insurance agents at (855) 708-2131. They’ll be happy to answer your questions and help you find the best coverage for your online business.
Looking for more information about starting and running an ecommerce business?
Check out these helpful guides:
The Complete Guide for Building an Online E-commerce Business
How to Sell Products Online: Just Follow Our Easy Step-by-Step Guide
The 8 Best Ecommerce Platforms for Small Business Owners
References:
(1) Learn more at sell.amazon.com/pricing.