By guest author Michael Rogers
As with any business, e-commerce businesses can suffer losses, some of which can be prevented while others simply cannot be avoided. While you can take action to prevent some losses, insuring against those unpreventable losses can help reduce the risk of major damage to your business. Unpreventable losses in e-commerce include:
Many small business owners often take out a Business Owner Policy (BOP), a standard policy that covers most risks and includes both general liability and property coverage. While this is suitable for many small businesses, e-commerce businesses have unique needs that the BOP does not cover including business interruptions and data security. While risk management is important, an insurance policy would also help. Online businesses rely on third parties to provide services such as Internet service, website hosting, and even deliveries. These services should be covered by appropriate insurance as prolonged delays could result in losses.
The first step in insuring your e-commerce business is to identify the most vulnerable areas within the business. These could be the areas of merchandise distribution, online fraud, delivery and so on. Once you determine where your business is vulnerable, the next step is to identify suitable companies offering e-commerce insurance coverage. For example, if you are a small online shop from Phoenix, you should first research local agent offers and then compare them with offers from national providers and then make the right decision based on the needs of your business. Keep in mind that different companies have different insurance products so it will be up to you to find out which is the most suitable policy out there for you.
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