7 types of commercial insurance for e-commerce businesses
Commercial insurance you may need:
- General liability
- Property insurance
- Business Owner’s Policy (BOP)
- Professional liability
- Cyber liability
- Product liability
- Workers’ compensation
If you run a small IT company, e-commerce business, or blog, you might think you don’t need business insurance. That’s not true, however. Online businesses face unique challenges and risks that could lead to major financial issues if they don’t have the right coverage.
Ask yourself a few questions:
- Do you operate your business from home?
- Do you own or lease a physical office?
- Do you have equipment or property that could get damaged, destroyed, or stolen?
- Do you collect money or store the personal data of customers or clients?
- Do you sell goods or provide services to customers or clients?
- Do you have employees?
If you answered yes to any of these questions, then you need commercial insurance. We review the seven types of policies you might need to give you better peace of mind.
1. General liability
Much like general liability coverage for your home, business liability insurance protects you from lawsuits related to third-party injuries or property damage. It will help pay your legal fees and any judgments against you. It also covers products and/or services that you sell or provide.
General liability covers:
- Bodily injury claims
- Medical bills
- Property damage caused by your business or employee(s)
Even if you work from home, it’s possible that a client could visit and get injured or you could experience property damage. It’s important to treat your home as your business, therefore.
2. Property insurance
If you own or lease a physical space for your business, you’ll need property insurance. This policy will cover damage to the building and outside property, as well as equipment, electronics, furniture, and other products stored inside. If you rent or lease space, the property owner generally covers the building but you are still liable for everything inside the office.
3. Business income insurance
This policy covers lost income if your business can’t operate due to physical loss or property damage. There are exclusions but it generally covers natural disasters and fires. Losses due to illness from viruses are usually not covered.
You can also buy a Business Owner’s Policy (BOP) which bundles general liability, property, and business income insurance into one overall policy.
4. Professional liability
We all make mistakes but some mistakes can cost you dearly. Also called Errors & Omissions insurance, professional liability coverage is designed to protect your reputation in the event of a mistake on your part.
Professional liability covers:
- Mistakes or omissions
- Missed deadlines
- Breach of contract
- Libel, slander, and privacy violations
- Advertising errors relating to copyright infringement
If you’re a third-party vendor, your clients might require you to have professional liability. Some states also require you to carry this type of policy, depending on your industry or the type of business you run.
5. Cyber liability insurance
While cybercrimes affecting huge corporations or infrastructure get lots of news coverage, it’s also a big risk for small businesses. Whether you run an IT business or e-commerce store, you could easily become a target for cyber thieves. Cyber liability coverage helps pay for costs related to a cybersecurity breach, including notifying customers, credit monitoring, and public relations to improve your reputation.
If you handle any of the following, you might need cyber insurance:
- Credit card or bank account data.
- Medical records or other patient data.
- Social Security or driver’s license numbers.
- Personal information such as names, birthdays, passwords, email addresses, and phone numbers.
- Sell or provide services related to computers, networks, software, or cybersecurity.
IT businesses may be able to bundle professional and cyber liability in a single policy known as Tech E&O.
6. Product liability
If you sell products to customers (B2C) or other businesses (B2B), it’s a good idea to carry product liability coverage. This policy covers legal expenses related to injuries or property damage claims due to products you sold, manufactured, or distributed. It can also cover claims related to defects, improper labels, or missing product warnings.
7. Workers’ compensation
If you have employees, you may be required to carry workers’ compensation insurance. This policy covers medical bills and lost wages if an employee gets injured on the job. It also includes disability and death benefits. Check with your state’s employment laws to determine if you need workers’ compensation and how much you need.
If you work from home
If you have a home-based business, policies like general liability and property insurance may be covered under your homeowner’s policy. However, you should call your insurance agent to determine what’s covered and what’s not, including any endorsements or extra protection you might need.
Protect your e-commerce business with the right commercial policies
Having commercial insurance is necessary if you want to stay in business. It’s designed to protect your assets and your property. It’s important to protect your most important assets so you don’t end up with a financial disaster. These seven types of insurance are important for most small businesses that have one or more employees.
Avante Insurance can help you secure the right commercial insurance to protect your life’s work. Contact us to talk about your business needs and request a quote. We will ensure you have the right coverage to protect the enterprise you’re working so hard to grow.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.