Business Insurance for E-commerce

Although e-commerce companies function mainly online, rarely having brick-and-mortar locations aside from headquarters, general liability risks exist. As a result, general liability provides a broad range of protection against some of the most fundamental risks companies face. Many peg this policy as “all-risk” coverage, benefitting e-commerce companies regardless of physical location. After all, general liability covers personal or property damage and bodily injury occurring on the business premises.

Employers are typically responsible for medical costs and lost wages when employees sustain work-related injuries. Furthermore, most states require this particular coverage to protect employees. Work-related injuries and illness expenses can occur even in the world of technology. This policy covers these expenses, protecting employees while keeping e-commerce companies running smoothly.

E-commerce companies gather, handle, and store mass amounts of personal data. Cyber insurance protects e-commerce companies from third-party lawsuits relating to electronic activities (i.e., phishing scams, ransomware, data breaches, etc.). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent. Unfortunately, cyberattacks have increased significantly since the global pandemic, forcing e-commerce companies to improve cybersecurity measures and practice more due diligence regarding data protection.  

Any company with employees faces the risks of employment-related allegations, such as discrimination, wrongful termination, breach of contract, etc. Naturally, e-commerce companies aren’t exempt from these types of lawsuits. The reality is that many e-commerce employees work remotely, sometimes blurring the lines of liability. Fortunately, employment practices (EPL) liability insurance responds to claims alleging employers have violated their workers’ employment rights.

Product liability insurance covers e-commerce companies from financial losses from lawsuits alleging that their products caused bodily injury or property damage. This type of insurance is essential for e-commerce companies because it can protect them from catastrophic financial losses. Even if an e-commerce company takes all reasonable precautions to ensure the safety of its products, there is always a risk that a product could become defective and cause harm. Product liability insurance can help e-commerce companies pay for the costs of defending against lawsuits and any damages that may be awarded to plaintiffs.

People often think of brick-and-mortar operations when on the subject of property protection. Still, although e-commerce companies sometimes have little real estate, like an online store or office spaces in multiple locations, they frequently invest in top-notch equipment to achieve their digital goals. For example, if company property is damaged or ruined in a fire or even a burglary, commercial property insurance responds. This policy reimburses e-commerce companies for direct property losses, supporting recovery and momentum.

Transit and transportation insurance covers e-commerce companies from financial losses resulting from the loss or damage of products while they are being shipped. E-commerce companies rely on shipping carriers to deliver their products to customers. However, shipping carriers can lose or damage packages for various reasons, such as accidents, weather events, and theft. Transit and transportation insurance can help e-commerce companies reimburse their customers for lost or damaged packages and replace lost or damaged inventory.