Opening an online business is actually a good idea right now because the demand for online goods has never been higher than it is right now. However, it is easy to mistakenly believe that you do not need general liability insurance, just because it’s an online operation. Admittedly, many of the clauses that general liability insurance policies protect a business against doesn’t apply to an online business, but in reality, a lot of them do. To provide the new and old names in e-commerce with an idea regarding how important general liability insurance is, even in e-commerce, the following discussion should prove to be quite useful.
Understanding the Definition of General Liability Insurance
By definition, or liability insurance protects against:
· Injuries to a third-party (customers, bystanders, etc.) claims
· Claims made on account of property damage caused to the third-party
· Financial losses incurred due to poor sales/catastrophic events
· Claims against your advertising/marketing methods
· Legal expenses and settlements, if covered by the policy
Understanding the Limits of General Liability Insurance
There are a few primary conclusions to be drawn from the definition above.
· General liability insurance doesn’t cover damage caused to your business
· It doesn’t include coverage against claims made by the company’s own employees
· Claims made by a third-party on account of auto accidents caused by your company are excluded
These are the limitations of General liability insurance, and next, we will detail the scope of general liability insurance in e-commerce.
The Scope and Usefulness of General Liability Insurance in E-commerce
· Marketing and advertising related legal claims are common in the online industry
· The financial loss protection clause will protect both online and offline businesses to a great extent and without any real difference
· Legal expenses and settlement coverage in the policy is just as useful for online businesses as it is for their traditional counterparts
It should be clear by now that the question is not really whether an online business needs general liability insurance; it’s more about who the insurance provider is and what the particular policy is covering. General liability insurance from The Hartford provides the full list of coverage expected, and they also have specialized liability insurance policies geared towards benefitting online businesses as well.
Keep in mind that while general liability insurance is extremely important, it’s not the only kind of insurance that your business may need, even if it is an online venture. For example, worker’s compensation insurance will protect your business interests against claims made by an injured employee in the warehouse or logistics department. Supply chains need real-world operatives, even if you are just operating a retail business via online portals. Also, if you have a purely software-based company, employees can sue companies for repetitive motion injuries such as carpel tunnel syndrome, for example.
Figure out the possible dangers by consulting a trusted insurance advisor online and formulate a bullet-proof insurance strategy to protect your business against both general liability and internal liability today.
Founder Dinis Guarda
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