E-Commerce Business Insurance

Protecting Your E-Commerce Business

There’s very little that can be classified as “easy” when it comes to running an e-commerce business. Your hard work deserves to be protected with the help of an insurance policy designed for the uniqueness of your industry.

With e-commerce insurance, you can rest assured knowing that you have a variety of coverages in place that can help secure the work you’ve put into your career.

Policies typically available for Amazon sellers, Etsy shops, and other e-commerce businesses:

What Types of Insurance Do I Need For My E-Commerce Business?

As an e-commerce business owner, you’re likely exposed to a lot of risks that may not be immediately obvious.

For example, while you may not be interacting with customers face-to-face, those customers are still interacting with your products — and that could open you up to potential product liability claims (more on that later).

Plus, with more e-commerce platforms like Amazon requiring proof of business insurance, it’s no wonder more online retailers are looking for info on which policies they should buy.

Here are some of the most common types:

• General Liability Insurance

  General liability insurance — commonly referred to as GL insurance, or commercial general liability insurance — can be a foundational insurance policy for e-commerce businesses that want policies that help offer financial protection in these areas:

  Product liability: This coverage is a big one for e-commerce business owners, and for good reason: It can help cover you in the event a customer claims that a product from your online store caused them damage in some way.

  Advertising injury: Having an online business means opening yourself up to a lot of digital risk, which includes claims involving copyright infringement, libel, slander, and more. A general liability policy could help pay for those types of third-party claims.

  Third-party accidents: If a vendor or client visits your location and accidentally gets hurt while there, your general liability policy could pay for any resulting medical bills and claims.

  General liability insurance can help cover a lot of the third-party claims you may face as an online business owner. And those lawsuits happen frequently. Did you know that a study indicated that 40% of small businesses will likely experience a property or liability loss within the next 10 years?

  Fortunately, general liability insurance can help cover those costs (including attorney’s fees - up to your policy limit). And with many policies having $0 deductibles, there’s a good chance you won’t have to pay any money out-of-pocket in the event of a covered claim.

  If you’d like a more in-depth overview, head to our guide on General Liability Insurance.

• Cyber Insurance

  General liability can be indispensable if accidents happen or products cause damage or harm. But as an online business owner, you could be an attractive target for people trying to steal customer information or take down your website (which is the same as taking down your business).

  If you already have antivirus and other cyber protection products, you’re taking steps in the right direction. Unfortunately, cybercriminals are relentless and clever. Research shows a hacker strikes every 39 seconds. Even if just one is successful, it could cost your business tens of thousands of dollars as a result.

  Cyber insurance can help cover many of those costs (up to your policy limits). Even better news, you can get coverage quickly, easily, and affordably.

  Here’s what cyber insurance usually covers:

  • Crisis management expense
  • Forensic and legal expense
  • Fraud response expense
  • Extortion loss
  • Public relations expense
  • And more

  Cyber liability insurance usually does not cover:

  • Potential future lost profits
  • Cost to improve system security
  • Loss of value from theft of intellectual property
  • And more
• Workers’ Compensation Insurance

  If you have employees working for your e-commerce business — even if they’re working part-time out of your home — you may need to get workers’ compensation insurance, depending on your state.

  Workers’ compensation is insurance coverage that can cover an employee’s medical bills as well as lost wages if they get sick or injured on the job. It can even potentially pay for death benefits.

  In most states, employers are required to carry workers’ compensation insurance when they hire their first employee.

  In summary, workers’ compensation insurance for e-commerce business owners can cover:

  • Medical payments
  • Lost wages
  • Rehabilitation expenses
  • Death benefits

Why Should I Get Insurance for My Online Business?

Running an online store comes with its own inherent risks. Average claims can reach tens of thousands of dollars, and having insurance can help cover those costs.

The good news: business insurance can be customized to your specific risks, so you don’t necessarily have to pay for what you don’t need. We can help you find the policies that work best for your e-commerce business. That way, you can feel confident that you’re getting the coverage you need to help protect your money and your peace of mind.

Getting insurance coverage for your e-commerce business also can:

• Help meet legal requirements in your city, county, or state
• Help customers feel good about purchasing from your store
• Help you rent a workspace, if you decide you need an office

• Help meet e-commerce platform requirements

• Is online retail business insurance required by law?

  The state or city (or both!) where you operate your e-commerce business may require you to have proof of insurance, especially if you have employees. Plus, you may find that the e-commerce platform where you host your online store requires you to carry general liability insurance for an online business.

  Even if you’re not required to have insurance coverage, there are still plenty of good reasons to get it, such as:

  • It helps ensure that you don’t have to use your business or personal finances to pay for any claims.

  • It can cover legal costs (like hiring a lawyer) if you’re sued by a customer.

  • It can help you get any licenses or leases that may require proof of insurance coverage.

• Is e-commerce insurance tax deductible?

  In general, you can deduct your insurance premiums when filing your business’s taxes. But we’re not tax experts, so it’s a good idea to speak with a tax professional or an accountant if you have additional questions on your specific business.

• How much e-commerce business insurance will I need?

  The answer really depends on your online business, so it’s tough to make an exact recommendation.

  But to help give you a better idea of how much you may need, your insurance coverage is typically built based on:

  • Your location
  • Where your sales are located
  • The products you sell
  • How long you’ve been in business
  • Your experience in the industry
  • Your payroll (aka the number of employees you have)
  • Your annual revenue
  • And more

  Those bits of information are helpful for creating a customized insurance package that helps cover your biggest — and most expensive! — risks.

• What should I consider before buying e-commerce liability insurance?

  If you’re thinking of buying business insurance, we recommend having the following information on hand when using our online quote tool:

  • Annual revenue estimates
  • Payroll estimates
  • Information on any previous claims

  This information can make it easier to get a quote from one of our insurers in under 10 minutes.

• What does e-commerce insurance cover?

  Your e-commerce business insurance coverage can be customized to cover you against the most common risks you face as an online retailer.

  For example, a bundled plan that includes general liability insurance and workers compensation (if you have employees) can cover:

  • Product liability
  • Accidents and damages
  • Employee injuries
  • And more

  So whether you need multiple policies or you just want general liability coverage to meet Amazon’s requirements, Simply Business can help you find the coverage you need, at an affordable price.

• How much does e-commerce business insurance cost?

  There’s no one set insurance cost for online retailers, as policies are customized to your specific risks and needs. But we won’t leave you hanging with no information!

  Your insurance premium is usually determined by:

  • Your payroll
  • Where you’re located
  • The products you sell
  • Annual revenue estimates
  • And more

  Want to see how much your business insurance coverage may cost? Answer a few questions about your business, and in just a few minutes, you could see policy options from insurance companies that specialize in protecting online retailers like you.

Why Choose Simply Business?

We offer convenient options to purchase insurance coverage. Wherever you are in your business journey, we are with you every step of the way when it comes to helping you find the right policy.

With your busy schedule in mind, we work with you in the following ways:

• Personalized Support: We guide you through the quoting process, whether you prefer online or phone interactions. Our team of licensed insurance professionals is dedicated to ensuring a smooth experience.
• Flexibility for Busy Schedules: If your schedule is hectic, we understand. We've encountered many situations where customers were too busy to complete their purchase via the phone. In such cases, we provide easy steps to purchase online, allowing you to obtain immediate proof of insurance within moments.
• Online Insurance Agent Chats: If you've completed your quote online but still need assistance before making a purchase, we offer online chats with our licensed insurance agents.

Ready to get started?

Use our free online quote tool to see policy options from some of the nation’s top insurers — all in under 10 minutes.

*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - March 2023 data of 10% of our total policies sold.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.