It should be no surprise to anyone to learn that the number of online businesses is growing at an astronomical rate these days.
One of the most common questions asked from company owners is whether their online business actually needs business insurance and why.
Although it may seem unnecessary when there is no brick-and-mortar location, insurance for business owners is still a real concern for online companies particularly with respect to liability.
An online company’s needs may be slightly different than those of one in an actual physical location; however, business insurance agencies still warn that it’s risky to go without this essential coverage.
What Is the Purpose of Business Insurance?
Before delving into whether or not your online company needs business insurance, it’s essential to understand what this insurance is and what it covers as well as to avoid any confusion with coverage that protects a business building.
While it can have physical building elements, business insurance is by and large a type of liability coverage that protects you and your company against damages that could occur whether selling at a physical location or online.
If there is a possibility that someone could be hurt or suffer damages in any way from something you sell or something your company does, you could be held liable.
What Liability Does An Online Business Have?
In understanding the purpose of these types of business owners insurance policies, it’s important to analyze your company to determine your liabilities.
Questions to be asked include:
- What does your business do and how does it do it?
- Who are your customers?
- Can your products or services cause injury or non-physical damage?
Beyond product injury liabilities, you could be subject to liabilities such as plagiarism, defamation/slander, loss of business data from hacking, errors and omissions, and more.
If you have employees, sell at markets as well as online, sell refurbished or secondhand products, or work from your home, those are additional liabilities that could affect your company operations.
Should You Insure Your Online Company?
Essentially, if there is a way that your online company could be sued by a client or customer, the answer will always be yes.
You may not need every type of coverage depending on your risk type and level and business insurance agencies can write a policy that offers you the types of coverage you most need so you aren’t paying for what you don’t need.
The end result should simply be a policy that protects you and your company in the event that something goes wrong, someone suffers damages and damages are sought and/or a lawsuit is filed.
Final Online Business Insurance Thoughts
Not every insurance company sells business liability insurance for online companies, so it is important find one that does.
Let that insurer analyze your risk and write a liability policy that gives you the business liability protection you need at an affordable rate.
Business owners insurance for your online company is the peace of mind you need to do business and have the same protection as other companies out there!