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  • A guide to online retailer insurance

    Online retailer Insurance

    In an ever-growing digital world, as an online retailer you may be able to avoid some of the issues that a high street retailer may face, such as costly overheads and soaring business rates. However, even as an online business there are other risks that you will undoubtedly share in much the same way that can be avoided with online retailer insurance.

    Just because you’re online doesn’t mean that your responsibilities change in terms of what you sell.

    It is always important to protect your business and future income as you never know what may happen or when the unknown will occur.

    What is online retailer insurance?

    Online retailer insurance is designed to protect your business from physical loss or damage to property or goods, as well as any claims that may be brought against you from third parties.

    Here are some of the questions that you should be asking yourself when considering online retailer insurance:

    Do you sell products?

    Let’s say you’ve supplied a product and it is perhaps faulty and damages or hurts something or someone. Your lucrative business or even creative hobby which finances you on the side can automatically turn into a financial nightmare! Accidents can happen when you least expect them and leave you financially exposed without the correct cover in place.

    Even when you haven’t manufactured the goods yourself you can be liable for compensation claims if the products bear the name of your business, or if you have repaired or refurbished them.

    Or maybe you could even face a false claim whereby you will need to pay for legal defence regardless of if you are liable, not to mention the potential or a hefty compensation bill at the end of it. This is where product liability insurance comes in.

    Do people visit you?

    As an online business this is less likely, however you may have suppliers or couriers coming to your business or home premises to collect parcels or attend a meeting. Perhaps you even attend some exhibitions or events away from home in addition to selling online?

    Despite the fact that you’re operating online you are likely to engage with other people at some point.

    In any of these instances you will need public liability insurance to cover you against any possible third-party liability claims for injury or damage, whether you are negligent or not.

    Do you employ staff?

    Do you employ staff to help you on a full or part-time basis? If so the employer’s liability insurance is a legal requirement as you will be responsible for their safety and welfare.

    Even if you only employ someone from time to time you will need employer’s liability insurance and if you don’t have it you can expect a £2,500 fine for every day you are without cover.

    If disaster struck would you be out of business?

    Consider the possibility of a major fire or flood and your entire stock content was lost as well as maybe the physical location that you operate out of. Just one unforeseen incident could jeopardise the future of your business and your ability to continue trading.

    In fact, as many as 40% of businesses in the UK are unable to continue because of underinsurance and not having business interruption in place.

    By including business interruption insurance your online business will be covered in terms of loss of profits and fixed business expenses during the time it takes to get you back up and running.

    Do you have stock that needs protecting?

    Perhaps you sell your products through a third-party online marketplace, such as eBay, Etsy or Amazon. Or you may sell directly via your own website. Either way, much the same as any other retailer, many online businesses will need to keep large amounts of stock (perhaps in a warehouse, home or garage).

    Trading as a business your stock won’t be covered under a normal home insurance policy. Should your stock be lost, damaged or even stolen including stock cover would ensure the full cost of replacement based on cost price.

    Getting online retailer insurance

    Unfortunately, many online businesses still have problems trying to find specialist online retailer insurance. As your business operates slightly differently not everyone provides such cover.

    Online businesses are often categorised as high risk due to their very nature and the fact that there are no geographical limitations. This means that many parts or elements of the product or service can originate from different countries or be hard to track down.

    However, at Bluedrop services we are a specialist insurance broker who have experience in this area.

    Alternatively, are you an online service provider?

    Perhaps you aren’t an online retailer providing physical products and simply provide online freelance services, such as graphic design, copywriting or such like.

    In any instance you will probably require similar lines of insurance described above as well as the option to insure against the possibility of risking a client’s financial or reputational damage. In such cases, it is also important to consider the inclusion of professional indemnity cover which protects you against professional negligence claims.

    Conclusion

    As we are very aware, one size doesn’t fit all. Discuss your business with one of our specialists and we can advise on the correct online retailer insurance cover to suit your individual requirements.

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