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Online Store Insurance: Business Insurance for Online Retailers

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Running any kind of business, including online stores, means that you may need business insurance if you don’t want to end up on the hook for more money than you can pay out for all sorts of unexpected expenses. Getting online store insurance is, in many ways, similar to getting ecommerce business insurance and retail business insurance

Throughout this guide, we will discuss the various forms of business insurance for online retailers that you need to know about, its online store insurance costs and more.

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General Liability Insurance for Online Retailers

While public liability online retail insurance is only designed to pay out if your clients get injured while they’re on your business premises, general liability covers more than just your customers. With a general liability policy, the business owner, their employees, and even third-party vendors will be covered while at your place of business.

Once again, whether or not an online retailer needs this kind of coverage depends on how much goes on at their workplace. Some online sellers may not even have employees in the first place, so this kind of insurance policy may be superfluous or not necessarily worth the money you spend on it.

As with a public liability policy, you and your employees will be covered in case any of you end up losing any property or having it damaged while you’re working. General liability coverage will also pay out if any of you are injured, up to the policy limit that you’re paying for.

Another thing that general liability insurance protects you from is advertising injury. This will kick in if you end up getting sued for slander in your advertisements or if you are found to have stolen an ad from another company. 

The average general liability insurance cost for online stores and retailers is about $32 per month or $380 per year.

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Cyber Liability Insurance for Online Retailers and Stores

If you run an online business, you may find that cyber liability insurance is more important than both public liability and general liability coverage. This kind of insurance is specifically formulated for businesses that tend to work with a lot of people over the internet and have a large number of customer records.

Cyber liability coverage will pay out if you end up having a data breach that results in customer data being compromised by a third party. If this happens, you may be held liable for damages by the people whose information you lost, especially if that info ends up being sensitive.

However, cyber liability insurance can also pay out if your business ends up losing crucial information that may end up being expensive to restore. The money paid out by the policy can be used to obtain the information once again, if it’s possible to get the info back in the first place.

Cyber liability insurance tends to be slightly more expensive for online businesses, with an average cyber liability insurance cost of about $46 per month or $548 per year. However, the smaller your online store is, the more affordable your online store cyber liability insurance quote will be, as it tends to handle less sensitive information.

Public Liability Insurance for Online Retailers

This type of business insurance for online shops is designed to pay out if one of your clients suffers property damage or ends up getting injured while they’re in your place of business. For example, if you recently mopped the floors and one of your customers slips and falls, this will pay out for any injuries they sustained.

Public liability coverage tends to be a rarer form of online shop insurance because most online retailers don’t have a place of business where they have customers work with them. However, some larger online businesses may still have in-person locations where they tend to the needs of their customers.

For example, if you run a warehouse where your clients can come and pick up their orders instead of having them shipped through the mail, you may wish to invest in public liability insurance. In most cases, public liability insurance tends to be more expensive than product liability insurance and is mostly included in general liability insurance policies, which cover more than just the public damage, but also damage that may be caused to employees, business partners and vendors.

The average small online store/retailer insurance cost is about $22 per month for standalone public liability insurance policy, which comes out to about $260 per year for this kind of coverage. It’s up to the individual business owner to decide if they see clients in person frequently enough to make this worth it, our recommendation though is to invest in general liability insurance, which covers more than just the public.

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Product Liability Insurance for Online Retailers

When shopping for cheap business insurance online retailers typically invest in product liability insurance before anything else. This is because your product will be the main thing that a client is interacting with since you don’t necessarily do business with people in person, so you aren’t subject to the same risks as a traditional business.

Product liability insurance will pay out if a product you manufactured or refurbished ends up injuring someone or causing them property damage. This kind of insurance will also cover you if one of your products is manufactured by another company but it bears the name of your business.

Product liability is a common form of insurance for online retailers that manufacture the products that they sell. If you sell another company’s products, then you may not need this kind of insurance because they will instead be held liable for the damages caused by their products instead of you.

Keep in mind that your product doesn’t have to be a traditional item that you use. Product liability insurance can also cover you if you sell food through your online business. The average product liability insurance cost for online retailers and stores is about $100 per month or $1,200 per year. However, product liability is mostly included in general liability insurance policies.


Online Wholesale Insurance

Wholesale insurance is similar to group insurance, but it’s sold to groups of people that would be too small to qualify for traditional group insurance. This makes wholesale insurance particularly suitable for smaller online businesses that would still like to get a preferential rate on their insurance policy.

Since wholesale is a way that insurance is sold instead of a specific kind of insurance policy, there’s nothing specific that it covers. You can get a wholesale general liability policy, wholesale cyber liability policy, and more.

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