Three Insurance Coverages You Need When Starting A Home-Based E-Commerce Business

Running an e-commerce business from your home is incredibly cost-efficient. This model eliminates the cost of renting physical premises for the business. Furthermore, unlike traditional brick-and-mortar businesses, e-commerce firms don't need conventional insurance policies such as public liability, property damage, burglary and theft, and workers' compensation. However, this doesn't mean that you should forego business insurance. Below are the three most important insurance policies for your home-based e-commerce business. 

Product Liability

If you sell goods to the public, you may be held liable for any injuries the products cause. Product liability doesn't apply only to manufacturers—distributors, retailers, and suppliers can get sued for damages, even if they didn't produce the product. Therefore, you should carry product liability, regardless of whether you manufacture the products. This coverage will safeguard your e-commerce business from financial losses if a consumer sues you for injuries resulting from using your products. 

Cybersecurity Insurance 

Running a digital business creates cyber risks you shouldn't ignore. These exposures can lead to loss of business, financial losses, or breach of consumer data. Therefore, you need cybersecurity insurance to protect your business from financial losses resulting from the following risks:

• Privacy breaches and data losses: This coverage indemnifies you from liability resulting from privacy and data breaches because of cyberattacks.
• Breach costs: This insurance covers the cost of data recovery and reputation management following a privacy breach.
• Cyber liability: This coverage handles legal costs and compensation for customers and third parties who suffer losses due to cybercrime against your business.
• Hacker damage: This covers the costs of fixing the damage caused to your e-commerce platform by hackers. You may also receive reimbursement for the income you lost while repairing your website.

Cybersecurity insurance can also cover ransom costs after cybercriminals hijack your e-commerce site. You can tailor your policy to cover the risks your e-commerce business is exposed to.

Business Property Insurance

Physical goods are at risk of damage or theft, even when stored safely in your garage or home office. Thus, if you sell physical goods in your e-commerce store, you require business property insurance. This insurance covers physical assets owned by the business, such as inventory, products, and equipment. For example, if a flood in your area destroys business stock stored in your home, you can seek compensation. This coverage will also reimburse you for losses incurred due to inventory or equipment theft.

Secure your e-commerce business from liability by taking out the applicable insurance coverages. Ask your insurer for a custom, comprehensive policy to safeguard your online business from financial losses. For more information on business insurance, contact a professional near you.