What Insurance Do I Need for My Retail or E-Commerce Business?
Jun 26, 2020
Find out what insurance coverages your retail or e-commerce business needs.
For the Retail and E-Commerce industry, when it comes to Business Insurance, one size does not fit all depending on your size of your business and the product you sell. Regardless, you will likely need these insurance coverages to protect your hard work from financial risk - especially as a small Retail or E-Commerce business. As a small business owner, if a claim were to occur, it will be difficult and often devastating to recover from without the right insurance coverages in place.
Who Needs These Insurance Coverages in the Retail & E-Commerce Industry?
Any business regardless if you are operating from a brick-and-mortar location or online from a private residence.
What Insurance Coverages Do Retail & E-Commerce Businesses Usually Need?
Commercial General Liability (CGL)
One of the most important types of insurance coverages you need to protect your business is CGL Insurance. This coverage can protect your business if a claim alleging to property damage or client injury arises from your goods or services. These lawsuits against your business can not only affect your bottom line, but may also damage your reputation. Understanding the risks your business is exposed to and having the right CGL coverage is critical to protecting your business.
This policy offers a range of liability coverages that most businesses need to thrive, no matter how big or small they are. A standard general liability policy covers lawsuits over:
- Non-employee bodily injuries on your commercial property
- Damage you caused to someone else’s property while carrying out your work
- Advertising injuries (slander, libel, copyright infringement, misappropriation)
Cyber attacks are becoming increasingly problematic for businesses, whether you run an E-Commerce business or simply want your online information protected. A Cyber Liability policy can help protect your business and works hand-in-hand with your CGL policy. This policy can help cover the costs and damages related to cyberattacks - such as the cost of hiring a security firm to investigate the attack for you.
Commercial Property Insurance
Commercial Property Insurance is designed to protect the physical assets of a business against loss or damage. Fire, earthquake, water damage and vandalism are just a few examples of events that are covered when you purchase Commercial Property Insurance.
Business Interruption Insurance protects businesses from lost income following a disaster (potentially including events like the COVID-19 pandemic and the associated shutdowns ordered by the government.) Business Interruption Insurance is especially popular amongst businesses such as retail stores, bars, restaurants and professional services firms such as dental clinics, medical offices, accounting and law firms.
Business Contents Coverage
Whether you are renting or you own your location, if you have stock, you need to consider Business Contents Coverage. Usually if you have Commercial Property Insurance, you can also get coverage for contents - in addition to damage to the actual physical structure. If you are renting or leasing your physical space, you will need to get a CGL policy and Tenants Insurance. You can get Contents Insurance Coverage riders to add to your policy to ensure your contents and property are adequately protected. Contents Insurance refers to anything inside that is of value to the owners and is separate from inventory or stock. This could include things like computers, furniture, art (assuming it is decorative rather than stock for sale), electronic device and machines.
Here's an Example of When This Insurance Could Help Protect Your Retail & E-Commerce Business:
In your store, one of your drink refrigerators for customers begins to leak and before you notice it, a customer slips on the puddle and injures their wrist. Your CGL Insurance helps cover the cost of damages and medical fees for the injured customer.
Your online jewelry store uses an e-commerce service to help you sell products and organize buyer information. This service suffers a cyber attack resulting in thousands of people’s, including your customers’, personal info to be sold. Cyber Liability Insurance can help cover the costs of damages, customer service and managing the crisis.
The neighbouring restaurant to your retail space catches fire during the middle of the night and unfortunately, the fire damages part of your physical space as well. Your Commercial Property Insurance covers the cost of repairs for you.
Your local government mandates a complete street closure where your boutique is to fix a power line - forcing you to close your business for a few days. Your Business Interruption Insurance can cover the loss of profits during this time.
You operate your online handmade pottery store from the basement of your home; unfortunately, a leak springs while you're away. Your Business Contents Coverage is able to cover the costs of replacing your pottery equipment and computers used to manage the store.
Other Frequently Asked Questions:
How much does Retail & E-commerce Insurance cost?
The cost for this type of insurance can fluctuate depending on a few different factors. Revenue size, liability limits and the products being sold are important considerations. If you are operating an E-Commerce business, the jurisdictions of where products are sourced and where they are sold can also play as major factors.
Do I need insurance if I operate my Retail Business online from home?
If you operate a business online from your home using marketplaces like Amazon, Shopify or eBay, you still need business insurance. If you have not disclosed this to your insurer, the insurance company has the right to deny a claim in full. All business activities or stock stored in a home needs to be reported to your home insurer. Evidence of separate Commercial General Liability and/or Property Insurance for your business assets in your home may be required.
Every business and situation is different - especially in this unique, entrepreneurial industry. That's why, it's important to speak to a broker to help examine your scenario and assess your specific insurance needs as a Retail or E-Commerce business. At Foxquilt, we can help provide you smarter business insurance tailored to fit the needs of your individual business. By joining our Foxquilt community of Retail and E-commerce business owners, you can receive better buying power and even unlock group savings on your insurance premiums. Get started on a quote for insurance built for your business.
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Do You Need to Have Workers' Compensation Insurance?
The laws about workers compensation vary state by state as to who is required to carry workers’ compensation coverage and who might be exempt. Learn more about your state workers' comp regulations.