Just because your online retail business doesn’t have a physical store doesn’t mean insurance is any less important.
Whether you have a large online retail business with your own warehouses, or if you’re just selling via eBay or Amazon from your spare bedroom, it’s important to have the right insurance in place.
At Patch we understand ecommerce, and our founder has in fact owned a number of ecommerce businesses over the years!
For information and quotes on ecommerce / online retail business insurance please call us on 1800 811 888 or click below to get started online.
We’ve also put together a guide on retail business insurance if you’re just after some information at this stage.
In this guide we’ll look at the different types of insurance your online retail business might require.
Public Liability Insurance
Almost any business type will need public liability insurance.
If you’re operating from your own premises, such as a warehouse, office or showroom, public liability is a must.
This form of insurance will cover you if a third party suffers an injury or damage to their property whilst on your premises.
It’s not about your staff, who will be covered by worker’s compensation, but rather it’s about covering third parties. This could be sales reps visiting you, clients doing click-and-collect or any other visitor.
If you’re leasing premises you’ll most likely find that one of your lease requirements is to hold public liability insurance.
But what if you’re operating your online store from home? Potentially you don’t have a huge exposure to a public liability claim, but the cost is so low that it’s probably not worth the risk.
More importantly for an online retailer, your public liability policy will include product liability insurance, and that’s vital regardless of whether you operate from home or otherwise.
Product Liability Insurance
We’ve covered off public liability insurance above, which is more about property damage or personal injury as a result of your business activities or relating to your premises.
But what about personal injury or property damage that is caused by the products you sell?
You might think that is the responsibility of the manufacturer or the wholesaler, but that’s not necessarily the case.
If one of your products was to result in injury, illness or some other loss to your clients, you as the retailer will most likely be dragged into any legal action.
When legal action of this type is launched, typically they will drag in every possible party. They’ll go after the manufacturer, the importer, the wholesaler, the distributor and you as the retailer.
Even if you as the retailer are found to have not been negligent or in any way responsible, you might still end up with a huge legal bill to get to that point.
Your public and product liability insurance will include cover for defence costs, which means the insurance company is paying your legal bills while they try to prove that you aren’t responsible.
If you are found responsible, your policy will cover the legal costs as well as the damages, provided of course that they fit within your policy limit.
Contents & Stock
Whether you’re holding millions of dollars worth of stock in warehouses throughout Australia, or just a couple of grand worth of stock at home, it’s vital to have it insured.
You can insure your stock against a number of risks such as fire, water, flood and theft.
For home-based ecommerce businesses, never assume that your home contents insurance will cover your stock! In most cases it will not.
Whilst on the subject of home and contents insurance, if you are operating from home make sure you notify your home insurance provider. Even if they’re not covering the business or its stock, you still need to notify them that a business is operating from the home.
Other Retail Business Insurance Types
There are many other forms of insurance that an online retail business can benefit from.
The best option is to speak with one of the specialist business insurance brokers at Patch.
We’ll be able to run through your business details to determine which types of insurance are right for your ecommerce business, and find which insurers are going to offer the most competitive premium
For more information please call us on 1800 811 888.
