With an increasing number of consumers shopping for goods and services online, digital businesses have been able to experience tremendous growth. But as a company takes on more orders, clients, and staff, the owner’s liability also increases.
You can protect yourself and your investment in your business through certain types of insurance. Even though your company may not have a brick-and-mortar presence to protect, you must still take precautions to protect yourself from digital security threats.
Here are a few types of insurance web-based businesses should consider for adequate protection.
Business Owner’s Policy
This insurance bundle is a good place to start when securing your digital or e-commerce business. It includes general liability insurance, commercial property insurance, and business income insurance.
- General liability insurance protects you against claims of property damage or personal injuries, such as a package courier injuring themselves while picking up goods or inventory stored within your home.
- Commercial property insurance protects the location, supplies, equipment, inventory, and more that is used to conduct your business. Keep in mind that if you operate out of your home, your standard homeowner’s insurance does not cover damage to these business-related items, even though you own the residence.
- Business income insurance provides coverage for any potential income you may lose as a result of a covered loss, such as property damage.
Professional Liability Insurance (also called Errors and Omissions Insurance)
If your customers believe you made a mistake or poor choice when providing them with your services, they could sue you for certain losses or damages. This type of insurance policy helps cover your own legal fees that may be associated with a court case or settlement mediation. Even though you do your best to eliminate mistakes, your clients may still feel as though your services harmed the success of their own operations. Therefore, it is a vital policy to have for any business offering online services ranging from marketing, graphic design, telehealth, and more.
Cyber Liability Insurance
Online businesses are more vulnerable to cyber-attacks. E-commerce companies may be hacked in order to obtain and sell your customers’ credit card information. Should this occur, your cyber liability policy would cover the cost of notifying customers about the breach, hiring an investigation team to find the attacker, and risk assessment to prevent future security compromises. Additionally, your customers may decide to sue you if they experience identity theft or financial hardship as a result of the cyber-attack on your company. Cyber liability insurance can also cover your legal fees during this process.
Business Interruption Insurance
By operating your business online, you most likely have a smaller overhead than a traditional brick-and-mortar company or store. However, this also means that your business relies on a strong internet connection, server stability, and possibly even access to a warehouse or inventory storage. If any of these are compromised or damaged, you may lose revenue and be unable to complete your payroll, rent, and other business expenses. This is especially common after major natural disasters that destroy internet service and buildings. Business interruption insurance provides coverage for the income you have lost during the interruption, as well as during the time it takes to rebuild your business.
Owning your own online business is exciting and enriching, but it can be difficult to navigate this digital space while protecting yourself and your customers. These policies are a great place to start – speak with your local insurance agent today to learn more about which options will keep your business secure.