Internet insurance insurance, commercial insurance for e-commerce companies and online store insurance are some of the names used to manage the type of business insurance that every e-commerce store needs.
If you already have an online store or you are planning to start one, you need to meet the insurance requirements of an online store.
2020 Online Store Statistics That Will Amaze You
Online shopping has moved from "never heard of" to becoming a billion dollar industry. The art of buying online has become a norm for people all over the world with more individuals embracing it daily.
Not excited yet?
By 2021, sales from online stores are expected to reach $ 4.8 trillion. Taobao, which is the largest online market in the world today, has a GMV of $ 515 billion. Tmall and Amazon follow in 2nd and 3rd place with a GMV of $ 432 billion and $ 344 billion in annual third-party GMV.
In July 2020, Amazon owner Jeff Bezos added $ 13 billion to his fortune in a single day.
There is no doubt that online shopping niche is a profitable and fast growing niche. And with the current direction, the world is facing the expectation that a reduction in its scalability is not feasible.
Along with the outbreak of Covid-19, purchases from online stores have begun to redefine how we will begin to make purchases even as we delve deeper into a digital age.
The Growth of Online Stores 2020
The growth of online stores can be largely attributed to the convenience it offers buyers. One of the unique sales suggestions for online shopping is improved convenience and customer response.
The stress of shopping on your own is relieved because you do not have to go through traffic or stand in line before you can buy something. From your home you can make a purchase and have it sent to your home address.
Online stores also have an engagement function that is not visible in our stores. This feature allows an intended buyer to see reviews of others who have purchased the product he or she wants to buy.
By going through a product's reviews of other customers informs a buyer's decision to proceed with buying the product or not to.
In addition, online stores allow users to choose from a variety of products listed on one platform. Instead of going up and down in a store and looking for what you are going to buy.
All of these features have greatly influenced the growth and revolution of online stores.
So if you've considered starting an online store but you've been skeptical of the market's viability, I think that's enough motivation for you.
Unfortunately, as online stores grow, they become prone to cyber attacks. When building your online store, be sure that it is susceptible to cyberattacks due to the way the internet is designed.
It is therefore important to know the different strategies that an online store can take to survive cyber attacks.
Main insurance covers an online store needs
Your online store (e-commerce company) must be insured and we have highlighted some of the insurance cover that is in demand for online stores.
- Business Interruption Insurance
- Cyber Liability Insurance
- Insurance Liability Insurance
- Product Liability Insurance
1. Business Interruption Insurance
Business Interruption Insurance covers the losses your online store may incur when an event causes your store to become inactive for a while. This inactivity may be the result of a data breach or downtime of the server hosting your online store.
In addition, damage to an inventory or goods or an accidental damage to any of your store's property may result in an interruption in your operations.
Business Interruption Insurance helps alleviate the losses you may incur in a situation like this.
2nd Cyber Liability Insurance
You may want to believe that your online store is not popular and will not be covered by any form of cyber attack, and therefore you do not need cyber liability insurance.
The truth is, you can not be sure. It is your duty to retain the sensitive information submitted to your store as users trust you sufficiently to place it there.
Instead of this, it is important to have a cyber liability insurance for your online store regardless of size.  3. Local Liability Insurance
Your online store will have something like a warehouse where you store the products you sell.
This building needs an insurance policy. A premise liability insurance takes into account medical expenses for damages incurred by clients or someone who visits your warehouse or store.
A state inspector may visit your store and he or she may be harmed and you do not have insurance coverage for such an event, you may be looking at the insolvency of your online store.
4th Product Liability Insurance
The products you sell in your online store that are either manufactured by you or other third party manufacturers should be covered by a product liability insurance. A product liability insurance covers problems that may arise when using any product from your store.
If a person is injured or suffers from an illness while using a product picked up from your store, a lawsuit will be filed against you. Your product liability insurance covers the expenses that the lawsuit may cost.
When do you need insurance for your online store?
Should you wait for your online store to become popular before getting insured?
Do you feel that insurance coverage is for the big online stores like Amazon, eBay, Target, etc?
You're very wrong.
You do not have to become a prominent store before you become insured because the risks, unforeseen circumstances and cyber attacks will not wait for your online store to grow before they happen.
Insurance coverage for your online store may come in the early stages of your business. Threats and adverse circumstances have no regard for size, as does insurance.
Most important of all is that your online store needs insurance coverage for data breaches. This is because data breaches are among the prevailing threats for every online store.
Why Every Online Store Needs an Insurance Protection for Data Infringement
Example of a Cyber Liability Insurance. It helps business owners deal with problems that arise as a result of the compromise of their servers.
Because your online store is hosted online by servers, it is prone to attack. And when an attack is performed on your store's server, it can lead to the theft of sensitive information. This data can be used to deceive unsurpassed users.
A data breach of this kind will see your online store violate lawsuits and legal claims. The costs of these claims and lawsuits are handled by the insurance coverage for data breaches.
In your business as an online store, you may be in breach of copyright infringement or in violation of the prescribed operating procedures of regulatory bodies and you may be required to pay a certain amount as a fine.
It's your data insurance policy that covers the costs of these crimes and fines. The cost of IT emergency support for your server is also taken care of by the data protection insurance breach.
Of course, no online store will succeed without an insurance coverage for data breach on the spot.
- Even in the start-up phase, your online store needs insurance coverage for data breaches.
- Along with the insurance coverage for data breaches, you also need non-life insurance, life insurance and product liability insurance.
- An insurance broker can save you the stress of trying to acquire all of these for your business.