Is Your Online Store Protected? A Guide to Insurance for e-Commerce
Running an online store helps you reach a wider audience and scale up your business. However, like any business venture, it comes with its own set of risks.
Common pitfalls for online entrepreneurs include cyberattacks, product liability claims, and website issues. In the 12 months leading up to April 2024, half of all UK businesses reported experiencing a cyberattack or security breach.
No matter your industry, having the right policies and precautions could help your business.
Do I need insurance for my online store?
Even if you’ve only just set up your business, an uninsured incident could cause severe consequences.
Getting cover may potentially protect you and your business from unexpected costs and serious legal liabilities. A few of the key benefits include:
- Financial protection: Insurance can cover costs from unexpected incidents like property damage or product liability claims.
- Legal defence: The right policy could help you to cover the costs of legal defence if you’re sued or involved in a dispute.
- Customer confidence: Having approved online retailer insurance can show customers that you’re a reliable business.
What are the most important insurance policies for online retailers?
Insurance can be a useful safety net for new and established businesses, but there’s no one-size-fits-all policy for every area of trade. Various policies could help you stay safe, including:
Public liability insurance
An essential layer of protection that keeps you covered against third-party claims for injury or property damage.
Product liability insurance
Covers against third-party claims made against your business if one of your products causes damage or illness.
Professional indemnity insurance
Keeps you protected from claims made by clients who said they’ve suffered negligent advice or services.
Business interruption insurance
Covers lost income and other expenses if you can’t operate your business due to an incident.
Cyber liability insurance
Safeguards your business from data breaches and other digital threats.
How to keep your online store safe
You should use online comparison tools and approved financial advisors to compile a shortlist of trusted insurance providers.
Compare the policy wording across two or three of them, checking carefully for exclusions. After you’ve chosen the most credible and suitable policy for your business, you should also:
- Protect customer info: Implement robust GDPR and comply with relevant regulations.
- Back up your data: Try to regularly back up your business data and website to reduce data loss.
- Review supplier contracts: Make sure your suppliers are insured.
- Secure your website: Use two-factor authentication, strong passwords, regular updates and firewalls.
- Stay informed: Keep in the know about risks and bugs affecting your industry, including cybersecurity threats.
Staying Safe
Choosing the right policy could protect your online store. When you work with a trusted provider, you can simultaneously grow your business, protect your reputation and plan for the future.
