What is eCommerce Business Insurance?
Jul 21, 2022
You may have heard about the new requirements for Amazon vendors to carry product liability insurance if their sales are over a certain amount. That news came as a wake-up call for tens of thousands of small business owners who realized that they’ll now be required to do something they haven’t thought of before - carry eCommerce liability insurance.
Thankfully Foxquilt has the answer. Our new eCommerce liability insurance, available online and in minutes, offers a unique solution to sellers who may not have thought about insurance yesterday, but can now wake up tomorrow with their business properly protected.
What is eCommerce liability insurance?
eCommerce liability insurance provides business protection to anyone who is selling their goods online. In light of the pandemic, nearly every small business was suddenly required to sell their goods online in some form or another. Most of us started a ‘side hustle’ making something that we’re passionate about, whether it was crafts or baked goods or anything else, and this coverage protects exactly that.
Just because someone is participating in eCommerce, that does not mean that that’s the only place that they’re selling! If you have a website to sell your cookies for example, but also sell them through a local craft store, and once a month at the farmer’s market, and from your own home on weekends - you’re still an eCommerce vendor thanks to those website transactions, and are still eligible for this coverage.
What does eCommerce liability insurance cover?
This sort of insurance coverage is primarily designed as product liability coverage, so that you’re covered in case one of your products is damaged, defective, or even worse injures a consumer.
The challenge that many small businesses face is that if you’re not handling and delivering every sale personally, it can be nearly impossible to maintain quality control. Whether you’ve hired a team to help oversee production or you’re importing goods from overseas, you don’t always know when something isn’t working, or if it may end up hurting someone.
eCommerce liability insurance is designed to protect your business specifically against these sorts of claims. Our policy covers “products and completed operations,” so whether you’re making every part by hand or simply assembling materials that you’ve purchased separately and selling them as a complete unit - you’re still covered.
Who needs to carry eCommerce liability insurance?
You may have already encountered product liability insurance because one of your third-party vendors, such as a food hall or a craft show, required all vendors to carry coverage. The reason is simple: When you operate out of a rented or leased location, the building/business owner’s policy will not extend coverage to your business operations and services. If someone slips and falls over your booth lets say, and injures themselves, your policy would cover your business for bodily injury claims.
Recently though, more of the large-scale online retailers such as Amazon, WalMart, Wayfair and Etsy have begun to require their third-party vendors to carry product liability insurance. Because these companies are so large and so wealthy, they know that they would be at high risk for lawsuits in case someone was injured by a product from a third-party vendor.
Our policies name you as the primary insured, but sites such as Amazon require policies to name them as well, and we can add them on for no extra charge.
What’s excluded from this coverage?
Unfortunately we have had to exclude some of the higher liability items from our eCommerce insurance policies like baby/children clothes/accessories/equipment, alcohol, tobacco, firearms, weapons and so on.
The other notable exception is that this insurance is not designed to cover those who have a dedicated brick and mortar location. It is also not intended for those who do not do any eCommerce. If you appear weekly as part of craft shows or farmers markets along with your online business, then this coverage is perfect for you. If you have a dedicated store front, though, we’re more than happy to set you up with another policy.
Lastly, this coverage is meant to cover product liability and commercial general liability at this time, and does not cover stock or inventory that you may be holding onto, or any cyber liability that you may incur. We do support additional coverage for those, and can help add them on to your policy to protect against your exposure.
How do you get Foxquilt’s eCommerce insurance?
Foxquilt is proud to have designed a product that’s easy to use for almost any small business in the online marketplace. You do not need to have any prior coverage to get started, and you don’t even need to have prior experience in sales! It’s coverage that’s designed to support you right from day one of your business, so signing on earlier will help decrease your risk as you grow.
If you’re already starting to sell your products online, or you’re looking to get started but aren’t sure of your next steps, we’re here to help you set your business up right. Our job is to protect you so that you can do what you do best. Get your quote today.
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