In 2019 alone, U.S-based online businesses generated more than $340 billion in revenues, as reported by Statista. With more than 90% of adult Americans having access to the internet, most of your target customers already shop online. This means you should conduct an online store launch for your e-commerce enterprise. To take advantage of this ever-growing market, your business needs to have an online footprint, meaning you should launch an online store as soon as possible. While at it, you should ask yourself questions about insurance, because both online and brick-and-mortar stores face almost the same business-related risks.
Here’s a detailed look at 4 important insurance-related questions you should ask before launching an online store
1. What Possible Risks Can My Online Store Face?
Currently, cybercriminals are the main threats for any e-commerce business. However, your online store may also be at risk of theft, fire, and vandalism if you have a storage warehouse for your products. Besides, some online retailers use their garages and living rooms to store goods. Therefore, there is still a high risk that compels you to get business insurance as an online entrepreneur. Some of the typical risks faced by e-commerce entrepreneurs include, among others:
• Cyber attacks in the form of phishing, password attacks, and drive-by attacks
• Loss of products during shipping
• Damage of goods in storage
• Injury or death caused by your products
• Product recalls
2. What Type of Insurance Coverage Should I Secure for my Store?
On average, cyber-attacks happen 2,244 times every day, with at least 71% of them being ransom-driven or cyber extortion attacks, as noted in a recent study by the University of Maryland. In essence, this means that your online store is more vulnerable to cybercrimes than traditional risks such as fire and theft. For this reason, cyber liability coverage is the most important type of insurance for your online store. It will cover your business when cybercriminals attack your system, breach customer data, and ask for ransom. Some of the other insurance policies you may need include:
• Workers’ compensation insurance, if you have employees
• Product liability insurance coverage
• Health insurance
• Business income insurance
3. Is Liability Insurance Necessary for my Online Store?
As long as you are running a business, legal issues are bound to pop up. For instance, a customer can sue you for injuries caused by your products. On other occasions, you can be sued for failing to protect the customer’s private data during a data breach. It is at times like this that liability insurance comes in handy. Precisely, your online business is still at risk of facing legal issues, and so you should have liability insurance to protect it.
4. How Do I Identify the Types of Coverage I Need for My Store?
In general, the best way to identify other coverage types is to consult an insurance agent. Once you’ve outlined your business’s insurance coverage needs, you may now get ready for an online store launch. If you get insured early enough, your enterprise will be safe from cybercrimes and unnecessary losses resulting from property damage and lawsuits.
Before launching an online store, ask yourself these questions about insurance. To get a quote for cyber liability insurance for startups, call CF&P Insurance Brokers today at (925) 956-7700.