E commerce insurance can be split into two aspects of website operations, first party risks and the third party risks.
First party risks are risks due to a company’s size, its e‐commerce infrastructure and its international scope.
Third party risks are risks from people and organisations outside the business. Third party risks are complex and ever changing because of increasing regulation and controls by statutory authorities at national, European and international levels. Any failure to comply with these laws and regulations can bring fines, claims and cessation of business.
An important and often overlooked cover you should consider is Cyber Liability Insurance.
Cyber liability insurance cover can include;
- Data breach/privacy crisis management cover. For example, expenses related to the management of an incident, the investigation, the remediation, data subject notification, call management, credit checking for data subjects, legal costs, court attendance and regulatory fines.
- Multimedia/Media liability cover. Third-party damages covered can include specific defacement of website and intellectual property rights infringement.
- Extortion liability cover. Typically, losses due to a threat of extortion, professional fees related to dealing with the extortion.
- Network security liability. Third-party damages as a result of denial of access, costs related to data on third-party suppliers and costs related to the theft of data.
As an online retailer, it’s likely that most of your interaction with customers is virtual, so your public liability risk is probably quite low. If your business has a warehouse this could mean you or staff members have contact with members of the public, and could be held responsible for injuries.
Product liability cover, is usually a key part of online retail insurance, and is often sold as part of a public liability insurance policy. If you sell items online, you could be held responsible for any damage or injury the products cause.
Another important consideration is stock cover. It is likely that you keep a fair amount of the products you sell in your home or another site before shipping them to customers.
You are legally required to have employers’ liability insurance if your business has any employees.
If the service you offer is not retail, but includes giving professional advice, you may also want to consider professional indemnity insurance as part of your policy.