Many small business owners have embraced the online business model because of the obvious benefits of lower overheads – no expensive lease agreements, no store fit out costs or maintenance and utilities. This might lead you to believe that there are also fewer apparent business risks associated with having no physical store presence. However, just because you don’t have a ‘bricks and mortar’ business location, doesn’t mean you are not exposed to similar potential financial losses. Having adequate eCommerce insurance is an important way to protect your growing business. So when it comes to insurance for online business, what type of exposures should you consider?
E-commerce business insurance refers to a range of insurance products designed specifically for businesses that operate and sell online. These insurance policies are tailored to address the unique risks associated with conducting business over the internet.
The simple answer to this question is – yes! While you may not run the risk of customers getting injured on your property, you have many of the same risks as any other retailer or service provider plus a couple of more specific ones. If your online business sells goods or services you could definitely benefit from business insurance that could mitigate a number of key exposures.
Depending on the type of business that you run, you still have the potential for your products to fail, be stolen or damaged or for your services to be called into question. In addition, operating in a digital space means you are exposed to the specific risks associated with data breaches or cyber crime.
Potential financial losses and liabilities associated with digital or online-only businesses can include everything from your website or online store going down, to the physical loss of your products due to theft, fire, weather damage or transit issues. You may be held responsible if your products cause physical injury or harm to someone and your reputation may suffer damage if a client feels you have been negligent.
Having appropriate online business insurance in place can protect your ecommerce business against potential legal action from customers or third parties who may claim to have suffered injury or property damage as a result of using your goods and services. This can include covering legal costs should you need to defend yourself against such claims and may even cover compensation that you may be required to pay.
Broadly, insurance for online business falls into several main categories: liability cover, business continuity protection and transit insurance. Let’s take a look at the types of cover you might want to consider.
Online retailers and eCommerce sites are most affected by cyber liabilities, as the point of sale overwhelmingly relies on websites and IT. If you were affected by a cybercrime you would likely suffer business interruption and it could impact your business profitability.
Cyber insurance protects against losses due to cyber incidents such as data breaches, hacking or accidental loss of customer information. Cybersecurity is one of the most significant challenges for an online business nowadays. Potential exposures include data breaches and the associated fines and penalties; cyber attacks where your data is encrypted and held to ransom; data loss and recovery costs and reputational harm.
Depending on how specialised your business is, you need to consider how much you might be affected if an integral part of your business e.g. machinery breakdown such as refrigeration units or storage facilities such as warehouses was unavailable or offline for any period of time.
Business Interruption Insurance provides compensation for lost income and other expenses if the business is unable to operate due to physical loss or damage from natural disasters such as fires or floods. It can cover financial losses such as lost profits, employee wages, fixed costs such as rents, temporary relocation and recovery costs.
The nature of work engaged in by online retailers and eCommerce operations may include exposure of employees to office, warehouse and shop hazards such as slips, trips or falls or risks associated with heavy lifting.
While Workers Compensation insurance regulations differ by state or territory and by the size and type of business that you run, Employers Liability Insurance can provide cover for compensation for medical and hospital expenses and rehabilitation services should an employee be injured in the course of carrying out their duties.
If you run a manufacturing or labour intensive operation and depending on the size and scale of your business, you may have a greater risk exposure to employee unforeseen actions or wrongful acts in your business operations.
Management Liability Insurance can safeguard you against claims arising from mistakes, actions or decisions made by your company directors, managers, officers and employees. It can cover the cost of investigating, defending and settling claims by a third party, as well as paying compensation the business is liable for.
Don’t let the term ‘inland marine’ confuse you. This isn’t cover for transporting goods on a ship. If your eCommerce business transports products, materials or equipment over land via truck or train, you may be exposed to risks of your products being lost or damaged in transit or while being stored in a warehouse.
Inland Marine Insurance can protect you should you lose products, materials or equipment due to theft, rough handling that causes damage or bad packaging resulting in damage. It can also cover you for damage or financial losses incurred while your goods are being held by a third party such as a warehouse or logistics company.
E-commerce insurance is crucial for online businesses due to the particular vulnerabilities they face, such as cyber threats, logistical challenges, and the global nature of access, which can expose them to various regulatory environments and litigation risks.
If you operate an online business contact AIB’s business insurance experts for assistance in selecting and getting a tailored quote for a policy that covers your specific needs.
There’s a lot to like about working for yourself, including freedom and flexibility. But it’s not without its risks. Insurance for freelancers can be a safety net should things go wrong and without the right insurance cover your income and personal assets could be at risk.
In a worst-case scenario, you could be forced to sell your home or other assets you’ve worked hard to amass.
There are many different ways to freelance in many different industries. Some options include writing, graphic designing, web development, marketing and virtual assistant.
Each job will have different risks and insurance requirements. So, it’s important to speak with an insurance broker and tailor your insurance program to your field.
But when it comes to insurance for freelancers there are some common insurance policies freelancers typically take out, so let’s take a look at what they are.
If a client believes they’ve suffered a financial loss due to advice or services you’ve provided or failed to provide, they may decide to seek compensation from you.
Professional Indemnity insurance is there to help protect you if this occurs. It can cover the cost of your legal defence and any settlements you may have to pay to the other party up to your policy limit.
“Irrespective of the merits of the claim, having a client take legal action against you can be stressful and time-consuming,” Steadfast Broker Support Manager John Clark says. “It’s also very expensive. PI cover can help you protect your assets and reputation.”
All business owners are legally required to take reasonable steps to ensure the safety of their customers, staff, suppliers and members of the public. The same applies to freelancers.
Public liability insurance may protect you against legal action from individuals or organisations that claim to have suffered an injury or property damage, in the event you are held liable.
“If you’re working with clients face-to-face, in their homes or premises or in public spaces, this is essential cover,” Clark says. “Public liability claims can be protracted and very costly, and having to pay someone out could potentially be ruinous for a sole trader.”
As a freelancer, your income depends on your ability to work. If you’re unable to do so for an extended period of time as a result of illness or injury, you may end up having financial difficulties.
Income protection insurance is a safety net that can help keep you afloat until you’re able to resume operations. Depending on the type and level of cover you choose, you may be able to receive up to 70 per cent of your regular income in monthly payments for the duration of the benefit period in the event of a successful claim.
“As a freelancer, you don’t have sick leave or access to workers compensation insurance, and unless you have significant reserves, being off work can lead to significant hardship,” Clark says.
“Income protection insurance can give you the opportunity to recover without that added financial pressure.”
Whether they consist simply of a desk, laptop and phone or valuable specialist equipment, it’s impossible to work without your tools of trade.
Business and portable equipment insurance may provide protection against loss from damage or theft when you’re working from your home or office, at a client site, or when you’re on the move.
When you’re working for yourself, safeguarding your operations, income and assets is vital. An AIB insurance broker can help you evaluate your requirements and source affordable insurance policies that are the right fit for your risk profile. To get started, contact us today.
This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your AIB insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.
Steadfast Group Ltd ACN 073 659 677
Management Liability is an important addition to a business’s overall risk management and insurance portfolio.
Management Liability insurance covers a wide range risks, which arise from actions and decisions of directors, officers and managers while running a business. Improper conduct such as sexual harassment, unfair dismissal or defamation are some examples of risks which can be covered.
Because the breadth of risks covered by Management Liability is broad, it’s sold as a package of separate covers. Each cover addresses a different risk. Your broker will review your business and suggest the most appropriate management liability for your business.
Management Liability insurance includes the following covers:
This product is specifically designed for small to medium sized private company or co-operative. If you employ staff, then at a minimum, Employment Practice Liability should be a serious consideration.
Ignorance of the law is no excuse – so protection is important.
It can be difficult to keep abreast to changes in laws and regulations relating to businesses, but ignorance is no excuse. Small businesses are exposed to legal and regulatory risks and ensuing fines from government or industry regulatory bodies. These fines can reach hundreds of thousands, or even millions of dollars. Even if prosecution does not result in a fine, defending litigation can be financially crippling.
If you haven’t reviewed your business insurance for a while, now is a great time to do so. To discuss all of your management liability cover needs, contact your AIB broker today.
Important notice – Steadfast Group Limited ABN 98 073 659 677
This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. These insurances are issued by various insurers and can differ.
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