What is e-commerce insurance?

E-commerce insurance is a form of insurance that is exclusive to online retailers or business owners who tend to conduct their business online. Since the breakout of Covid-19, e-commerce businesses have thrived, but at the same time, these expanding businesses are exposed to cyberattacks of different kinds. Data breaches, property damage, inventory theft, and supply chain issues are common risks in any e-commerce business. To tackle these risks, online retailers need insurance that covers the unique risks of conducting business online that are not covered in general commercial insurance. In short, e-commerce insurance offers protection against the unique risks associated with any online business.

Who needs e-commerce insurance?

These days, there are a lot of people working through online platforms. Not all of them are entrepreneurs but are somehow related to online business activity. Let’s say that any online business whether it is an online retailer, Amazon seller, wholesale company, a manufacturing company, or a subscription company, e-commerce insurance can be used for any of them because all of them allow some sort of online business activity. Being able to sell, manufacture, and develop a business through digital platforms might expose the owner to different liabilities but e-commerce insurance can offer comprehensive coverage and protect the business. The idea of separating e-commerce insurance from general commercial insurance is to make it accessible to those businesses that manage international shipments, customer relations, and general liabilities that concern their businesses. For instance, if you are an online retailer, you would want an e-commerce insurance policy that can protect the above-mentioned risks of your business. 

What is covered in e-commerce insurance?

E-commerce insurance covers different aspects of an online business. Here are some of the common scenarios that are obviously covered under any e-commerce insurance. 

Cyber liability: If a business happens to endure a data breach or a glitch in the data system that results in data loss, then under the e-commerce insurance policy the insurance company will cover the cost that will be used to repair the data system along with the legal fee that will be needed to resolve the matter. 

Product liability: If you are in the manufacturing business and sold your product to a customer but it has caused an issue to the customer, he or she can sue you. When that happens, you need to have e-commerce insurance to cover your product liability legally and cover the medical expenses.

Besides these, e-commerce insurance can also cover commercial property insurance and general liability insurance that covers any kind of property damage and injury on the premises of your property. 

How much e-commerce insurance would cost?

Just like general insurance, the e-commerce insurance policy would depend on different factors of your business. For example, the sales volume of a business, the number of employees, the value of inventory, demand, and supply and not to mention the risks of a business based on its niche play an important part to determine the premium of any insurance policy. If the business involves expensive and high-risk products, then the e-commerce insurance cost would be higher along with the monthly/yearly premium. However, basic, low-risk insurance for a small business could be expected around $500 annually.