Online risks need e-commerce insurance. We can help.
Operate exclusively online? Growing your business via Shopify, Amazon, Wayfair, ebay, or Etsy? Online risks are different than bricks and mortar risks. This is why you need dedicated e-commerce insurance to address the specific risks of online retailing.
E-commerce store owners trust our experts to align their business with coverage that’s built to address online retail risks.
Key e-commerce facts for Canadian online business owners
Worried about the risks of online retailing? We debunk some key myths about e-commerce business below.
Q. If my house catches fire, would my home insurance cover my e-commerce inventory?
A. If you run a business out of your personal residence and haven’t disclosed this to your insurer, the insurance company has the ability to deny your claim fully in some cases. All business activities or inventory stored in a home should be formally reported to your personal home insurer. Evidence of separate commercial general liability and/or property insurance for your business assets in the residence may be required.
Q. I hear that some Amazon retailers in Canada get insurance from a US-based company and use a US mailbox. Is this a scam?
A. Legitimate e-commerce insurance for a Canadian legal entity or sole proprietor in Canada must and can only be purchased from a licensed insurance company in Canada. The e-commerce insurance must also be placed by a licensed insurance broker in the province where the client lives or is incorporated in. More info can be found on the Insurance Bureau of Canada website.
Q. How Much Insurance Do You Need for an E-Commerce Business?
A. It depends on the types of products you sell and other factors like the size of your business, how many employees you have, your risk tolerance as a business owner, and how much revenue you generate. It also depends on how many commercial assets you have and what you want to protect under your insurance policy.
If you have more assets, inventory, and commercial property, you might want to purchase more insurance coverage to ensure you have adequate protection in case anything goes wrong. When you sell many products on your website, especially in a heavily regulated industry, you might want to purchase more product liability insurance in case customers claim the products they bought were defective or caused them property damage, injuries, and illnesses.
Q. How Much Does E-Commerce Business Insurance Cost?
A. The cost of your e-commerce business insurance depends on many factors. Insurance companies look at the size of your e-commerce business, how much inventory you have, the value of your business, how much revenue your business generates, and the number of employees you have. Insurance premiums are also impacted by how much coverage you purchase, the types of insurance you need, and how many deductibles you have.
Generally, insurance for an e-commerce business can cost anywhere from $500 or more. If your products are more high-risk in nature, your insurance might be more expensive. If you have a lot of inventory and employees, your insurance policy might also cost more than insurance for a smaller business with not a lot of stock. Higher deductibles also mean cheaper insurance policies since you’re paying more out of your pocket.
Q. What is E-Commerce Sales Insurance?
A. E-commerce sales insurance is for online retailers that sell goods and services. It protects your business, business contents, products, and your team. It also protects your e-commerce business against liability to your customers and suppliers. You can purchase e-commerce sales insurance that includes general liability coverage, cyber security coverage, product liability, commercial property insurance, and business interruption insurance.
Q. Does an E-Commerce Need Insurance?
A. Any business should have adequate insurance protection against liability claims and litigation. There are many risks to running a successful e-commerce business, such as data breaches, defective products, and inventory storage. Comprehensive insurance coverage can compensate for lost revenue from insured perils, damaged business assets, or third-party claims.
Related Matters: How to get Amazon retailer liability insurance in Canada
Q. Are Canadian e-commerce insurance policies enforceable if I sell to American customers?
A. A properly placed online retailer policy can include North American or Worldwide territory clauses. If desired, your e-commerce policy can cover lawsuits filed in the US and Canada or just in Canada.
E-commerce 101 – Canada & the U.S.
What to know when you are buying online retailer coverage in North American and around the world…
Q. $1 million in CGL (aka commercial general liability) is the standard for pro merchants. Is it available in Canada and the United States?
A. Yes. If you have Canadian legal entity or are a Canadian citizen with a Canadian mailing address. We place CGL insurance for your CDN, US and global online e-commerce sales.
Q. What happens if I get sued in the US?
A. While it’s rare that a Canadian e-commerce retailer would be sued in the US, our policies cover lawsuits brought in the United States. Note that coverage for defense costs and settlements or judgments against you can be covered.
Q. In what provinces can I get e-commerce insurance?
A. With the exception of Quebec, we have licensing in all provinces.
Q. How does e-commerce insurance work for sole-proprietors?
A. Your policy can be placed under your personal name or your legal entity as a sole-proprietor.
Specialized online retailing coverage Q&A
Q. Can I get e-commerce coverage if I sell a variety of products such as retail arbitrage, online arbitrage and wholesale?
A. Yes. Just provide a breakdown of the annual revenue from each type, the products or product categories as well as the percentage split between CDN, US & Global sales.
Q. What e-commerce coverage is available for children’s toys?
A. Children’s toys are a high-risk category and insurance premiums are higher. Your responses to our Q&A and product testing documentation will secure e-commerce coverage options for children’s toys.