Online shops are, literally, everywhere.
You'd be forgiven for thinking this virtual ubiquity and relative anonymity affords internet traders some protection. There's safety in numbers, right?
Also, most of the rules and regs that apply to high street shops don't apply to online retailers, either. That's true isn't it?
Well, is it? Just how safe is your online shop? And should you be protecting it with insurance for online retailers?
Not having a 'traditional' shop does liberate you from certain onerous obligations and costly overheads, it's true.
You're not dealing with people face to face so that's a weight off. No health and safety boxes to tick, no sky-high monthly business rates to find, no complex infrastructure and maintenance to take care of.
But it's not all good news.
The fact you're online doesn't change your responsibilities in terms of what you sell. It doesn't necessarily reduce your business's liabilities either – in fact in some cases it actually increases them.
The bad with the goods
Let's look at the things you sell and how insurance for online retailers can help deal with accusations your stuff isn't up to scratch.
Because if something you've supplied damages a customer's property, injures them or makes them ill, you could be held liable. That's especially so if you make what you sell – clothes, jewellery, certain foods for example.
It's likely the disgruntled person/people will claim against you for damages. This will include a compensation figure, probably for many thousands of pounds depending on the extent of the damage/illness/injury.
Rightly or wrongly, you'll have to defend yourself. That means an expensive solicitor and time away from running your business, neither of which you can likely afford. Worse, you could be looking at a big compensation bill on top.
As always, the answer to this potentially business-crippling problem is insurance. Specifically, online retailers' product liability insurance. It pays those legal bills for you, and picks up the compensation tab if you're at fault.
No man's an island. No internet retailer is either.
Despite the fact you're online, every now and then you'll need to 'engage' with other people. That could be a courier picking up a parcel or three, or a supplier coming for a meeting. You might even venture into the real world at some point and temporarily set up shop at a market or trade fair.
That's no problem, except it tends to attract our old chum 'where's there's blame there's a claim' (although he's no chum of ours it has to be said).
Coming into contact with the general public automatically puts your business at risk: that courier might trip on your loose front step, you might spill tea on your supplier's laptop, your pop-up shop might topple on to a customer. Any of these unfortunate things could mean a negligence claim against you, accompanied by a sizeable compensation hit.
If you're in the line of fire, public liability insurance for online shops helps. It pays for your legal defence, regardless of whether you're liable, and compensates the person claiming if you have done something wrong.
OK, so, people not connected with your business could cause potential problems. Fair enough.
But what about the people in your business? You're all on the same side, right?
Well, yes. But also no.
If you employ staff – permanent or temporary, paid or unpaid – you're responsible for their working environment, including their safety and welfare. So much so that the Health and Safety Executive (HSE) has made doing so a legal requirement.
That legal requirement comes in the form of employers' liability insurance. In simple terms, if you have staff, you need it. Even if your staff is just one person (other than you) and even if that person is just helping out from time to time.
Claims can be made against you if people get injured or ill as a result of working for you. Especially if you haven't given them proper training (like how to lift a box, for example) or the right equipment (like gloves for getting hot stuff out an oven).
As it's a legal thing, you'd better be sure of your position. If you don't have employers' liability when you should, you can expect a £2,500 fine for every day you're without cover, and a further £1,500 fine for not displaying your insurance certificate. The best way to check you're OK is to read the HSE's guide for employers.
If you have nothing to sell, you don't have a business.
But you know that already. That's why you have a contingency plan if something terrible and unexpected happens to your stock. A contingency plan that includes the unlucky-but-equally-crippling scenario of having your business equipment stolen or damaged.
You do have a contingency plan, don't you?
If you do, it'd better not be something like: 'It's OK, I've got home insurance'.
If it is, you might want to look at it again. Because many standard home insurance policies specifically exclude claims for business-related equipment and property. That could leave you high and dry, with orders to fulfil, overheads to pay and a reputation to protect.
Fret not. There's a straightforward solution that doesn't involve turning your house into Fort Knox.
Property insurance covers the things you need to run your business for fire, flood, theft, and accidental damage. That includes both your stock and what you need to sell it. Team it with business interruption insurance and you've got total protection if an unexpected disaster stops you trading, including cover for lost profits too.
As we’ve already seen, if your stock’s wiped out and you have nothing to sell, you don’t have a business. The same applies if you have no means of selling it – no website or online presence.
That can be the business-crippling reality if you’re hit by a cyber-attack. One false click or undetected software vulnerability can let the hackers in to lock your files, send your website into meltdown and steal your customers’ personal data.
If that happens, you can’t trade or fulfil orders, so you can’t turn a profit. Meantime, customers wander off elsewhere to do their virtual shopping and the regulator starts to take an interest.
That’s when you need cyber liablility insurance to help get you up and running again as quickly as possible. Importantly, it pays for technical expertise to stop the attack, repair your systems and restore your website.
It also covers legal costs and pays compensation if you’re sued for losing customers’ personal or financial data. Plus, it helps handle any official enquiry by the Information Commissioner’s Office.
Insurance for online retailers in a couple of clicks
Don't get us wrong, running an online shop isn't a particularly risky undertaking. But, as always in business, you have to make sure you're doing all you can to protect yourself and your investment.
Thankfully, insurance for online retailers does just that, and it's incredibly easy to get cover. Click here to find out more and get a quote.
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