Do You Need Business Insurance for Your Internet Business?

It is now easier than ever for people to start an online business. All you have to do is create a website.

It sounds fantastic in theory. It is fast, simple and often cheaper than opening a shop in a brick-and mortar location.

It’s easy to forget the steps that can help protect your business like purchasing e-commerce insurance.

Internet business insurance can protect you against financial loss if you are an online retailer selling products on Amazon or eBay, or a web designer creating websites to entrepreneurs.

This article will focus on:

  • Online businesses need to consider the types of coverage they offer
  • What is the cost of business insurance?
  • How to get the best business insurance
  • How Next can help get you the internet-based insurance that you need.

What coverages should be included in a package of business insurance?

It would be great if you could have all your protection under one policy. There is no one type of insurance that can cover all your risks as an owner of an online business.

To get sufficient coverage, you will likely need multiple policies. These are the five most common types of ecommerce business insurance.

1. General Liability

General Liability Insurance covers the cost of common injuries and property damages that businesses may face.

Let’s take, for example, a personal care product line that you create and sell online. Your shampoo is not properly labeled when a customer purchases a bottle.

Instead of having thick, healthy hair she experiences an allergic reaction which requires a visit to the doctor as well as prescription medication.

General liability insurance can help you cover legal fees and settlement costs if she sues to get her medical bills paid.

2. Professional Liability

Professional Liability Insurance, also known as E&O Insurance, protects you from being accused of making a mistake that could cause damage to their business.

Let’s say you are a web designer and you agree create a website to launch a client’s product. The site takes longer than anticipated and goes live six weeks after your deadline.

Your client claims that the delay caused a 20% drop in sales and that they are suing you for the loss. If a judgment or settlement is made, professional liability insurance covers the costs of legal fees and court costs.

3. Commercial property

Commercial property insurance covers all you need to run your e-commerce business. If property is damaged or stolen, it will assist with replacement or repair costs.

You may be able to replace your income temporarily if your operations are interrupted by a covered event such as a fire, wind storm, or other similar events.

This is how it works in reality. Let’s say you’re selling collectibles online and you have a fire to store your inventory.

Insurance for commercial property covers the cost to replace your inventory and other items that were damaged by the fire. It will also pay to replace income until your studio is safe and you have enough inventory to fulfill orders again.

4. Workers’ compensation

Most states require that businesses with at least one employee have workers’ compensation insurance. If an employee is injured or becomes ill at work, it helps to pay medical bills and lost wages.

Let’s suppose you own an Etsy shop that sells handmade jewelry. So you decide to hire someone to help you keep up with demand.

One of the patients develops carpal tunnel syndrome after spending hours making jewelry with wire cutters and needle-nosepliers.

Workers’ compensation will cover her medical expenses and lost wages until she is able to return to work.

5. Commercial auto

Commercial auto insurance works just like your personal policy but protects you while you drive company vehicles or your personal vehicle for work.

Let’s take a local delivery company as an example. Your website allows customers to place orders for dry cleaning or grocery delivery.

Commercial auto will cover you if you are involved in an accident while you drive to pick up or deliver a customer’s order. Most cases will not be covered by your personal auto insurance.

What is the cost of business insurance?

You might now be curious about the cost of all this company insurance. Because premiums are dependent on many factors, it’s difficult to give an exact figure.

  • What type of policy do you want?
  • What type of work do you do?
  • If applicable, the number of employees you have
  • The property’s value that you wish to insure
  • The location of your business
  • Your past insurance history
  • What type and how many vehicles do you use to transport your business?

Businesses in high-risk industries tend to pay more for insurance than those in lower-risk sectors.

Next uses AI and machine learning, backed up by an insurance team of professionals to find the right coverage for you at an affordable cost. Our premiums are often 30% lower than other insurers.

How to find the best online insurance for your business

Although it may seem difficult to find the right insurance for your online company, it is possible. You can easily find the coverage that you need by following a few easy steps.

  1. Assess your coverage needs.
  2. Get multiple quotes from different providers. Different premiums are determined by different criteria. It’s a smart idea to get quotes from several companies to ensure you aren’t paying too much. Many companies offer free quotes online and over the phone.
  3. Check your policy options. Make certain that the quotes you have received provide the coverage you require. Make sure you check for exclusions to avoid any surprises when filing a claim.

Compare quotes from various insurance companies to ensure that all policies have the same coverage, exclusions, and policy limits. Compare apples to apples.

  1. Select the right policies for your business and make your purchase.