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E-commerce Business Insurance is necessary for online and digital businesses to protect their financial assets from a myriad of risks such as cyber attack, general liability and more.
The Indian e-commerce sector is rapidly growing. In the digital landscape, where individuals prefer to buy everything online, demand for e-commerce business has increased. However, running an e-commerce business is challenging, with many risks involved, such as damaged products, online breaches and more.
Not only do these risks lead to legal proceedings, but they also affect the finances of small business owners. Considering this, e-commerce owners like to have SME insurance for their businesses. This kind of insurance for e-business offers greater freedom and also securing a business's financial future.
Read this blog to get detailed information about small business e-commerce insurance.
What is E-commerce Business Insurance?
E-commerce business insurance is a policy or insurance designed for online e-commerce stores to protect their financial assets during any unforeseen circumstances. This business insurance plan protects online businesses that may affect business activities due to incidents such as data breaches, cyber crimes, loss of intellectual property, lawsuits, etc.
Need for E-commerce Businesses Insurance
Most e-commerce business owners often wonder whether they require e-commerce business insurance. Since these businesses generally operate online with no physical storefront, the business owner thinks that the chances of theft and personal liability damage in such business would be zero.
However, that is not the case. The associated risks can affect its reputation even if the business is internet-based. Here is why you need business insurance for your e-commerce business:
- Customers' data stored with a web-based business is critical and sensitive. If the business loses sensitive information due to cyber attacks, their clients can sue them.
- Handling legal battles and proceedings can drain money. Also, the decided compensation amount is usually high in this case. If an e-commerce store has business insurance, they do not have to worry about financial expenses.
- Further, getting to insure the company’s assets in case of damage is another reason for having e-commerce business insurance. Most e-commerce businesses sell products online, and receiving damaging products is a common customer complaint. With product liability insurance, businesses do not have to worry about the losses incurred due to faulty products.
Type of Ecommerce Business Insurance Coverages
Some of the common types of business insurance for e-commerce store owners are:
General Liability
It is a basic insurance policy for business. This type of e-commerce business insurance offers coverage against property damage, personal liability, etc., using your products or services. This kind of insurance is vital for business owners to protect their financial assets. Different insurance providers have different terms and conditions for general liability business insurance.
Product Liability
Another best e-commerce business insurance for online retailers is product liability. It is the insurance that provides coverage to company products and services against any risk. If an accident or injury happens using the business product or a faulty product has been received, this insurance will cover the damages incurred. This kind of insurance is specifically designed considering the manufacture, design and use of the company's products.
Transit Insurance
This is another type of business insurance that offers safety to products during transport. If damage has happened to business products during air, road and water transit, it will be covered under this policy. Businesses that use external logistic providers for drop shipping usually get this insurance with their services.
Cyber Insurance
Conducting online business requires collecting sensitive customer information, like their names, email addresses, bank details, etc. The data is collected or stored on web-based servers over the internet. The risk of cyberattacks is a concern among business owners.
This is where cyber insurance comes to help. This is insurance designed to provide coverage to businesses against cyber attacks. Everything is covered under this business insurance, from lawsuits, fines, settlements, and more.
Worker Compensation
Another e-commerce business insurance is workers' compensation, which provides coverage to company workers if something happens to them on the job. Expenses like medical treatment costs and death benefits are covered under this insurance type.
How and Where to Buy E-Commerce Business Insurance?
An e-commerce business owner can conveniently get their business insured online with a reputed insurer. Moreover, as a business owner, you can compare the policy offerings, coverage scope, and premium costs for different policies across multiple insurers before making a purchase decision.
Look for a suitable business insurance policy, apply for a quote, complete the application process, pay the policy premium and enjoy insurance coverage for your business.
To buy business insurance offline, you can contact the insurer’s branch office or get in touch with a reliable insurance agent.
It is advisable to go through the policy documents in detail and have complete clarity on the buying process, documentation, policy terms and conditions, and claim-related procedures to avoid any unpleasant surprises later.
Conclusion
Online businesses are flourishing. There are different kinds of e-businesses available, and having one-size-fits-all insurance policies will not do justice to their varying insurance needs. But no matter what kind of e-commerce business you own, big or small, having e-commerce business insurance is essential. Further, if you own a small business, consider buying SME insurance. It is best to know your business requirements before buying any insurance policy.
