E-commerce has grown at unprecedented rates over the past few years as consumer shopping preferences increasingly shift toward digital experiences. If you’ve invested in this industry, you should consider getting insurance for your online retail business. Your website or virtual store isn’t prone to water or fire damage, but there are many online business risks worth mitigating with insurance. Here’s a look at some of the important coverages to consider.
Operating an online business comes with a range of risks, especially liability due to data breaches and hacking. If the customer or employee data you’re handling, sending, or storing is breached, you can be sued for damages. Your business can also suffer interruptions, such as a denial of service or ransomware attack. Cyber insurance can protect you from financial loss if your network is hacked or customer data is stolen. Here’s how this policy can help:
- Liability protection: This coverage comes into play when your business is sued by data breach victims or clients who incurred losses after your system was temporarily brought down in a hacking event. Your policy will pay for damages and any punitive penalties if there are any data compliance issues.
- Legal defense: This component of your cyber insurance policy covers your attorney fees if you’re sued in court after a hacking event.
- Business losses: This policy would cover costs such as restoring your lost data, public relations exercises to repair your image, and lost income after a cyberattack on your computer network.
General liability can cover different types of third-party claims against your online company. Examples include:
- Bodily injury, such as when a guest slips and falls on a slippery surface in your office.
- Personal and advertising injuries, such as when you’re accused of defamation (slander/libel) or copyright infringement in court.
- Property damage liability can pay for any third-party assets that are accidentally damaged while in your custody, such as leased computers.
Directors and Officers
Does your online company have a board of directors? Directors and managers can face a range of liability issues, such as shareholders accusing you of mismanaging funds. If you’re one of the directors of your business, consider getting directors & officers liability insurance. This policy can protect your personal assets if you’re sued in your capacity as a top executive of the company. If you have company bosses (employees) who could be sued personally, consider protecting them with D&O insurance.
Any business inventory is an asset that can get lost, stolen, or damaged. Office equipment, furniture, and even your physical area of operation can be at risk if you’re an online retailer. Property insurance can cover these assets against damage, such as by fire, storm, or wind. Any physical assets that your virtual business depends on should be listed on your property insurance policy for maximum coverage. You can be compensated to repair or replace covered business assets that are stolen or damaged.
It’s important to have insurance for your online retail business, even if you don’t usually have customers visiting your physical office. Contact us at Kneller Insurance Agency today to learn more about the right type of policies to purchase for your company. Our agents will assess your risks and coverage requirements to help customize your financial protection.
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