As you’re well aware, becoming an entrepreneur and owning your own business in Canada has never been easier. That’s not to say that running a drop shipping business is easy – far from it. To be successful, you need to know what products will sell, find reliable manufacturing and shipping companies, manage your website, market your products effectively, process and track sales, service your customers, and more.
With all that’s on your plate, it can be easy to overlook risk management of your dropshipping business or possibly feel that you don’t need drop shipping commercial insurance because you’re not physically manufacturing or shipping the products you sell. Just like saying that running a drop shipping business is easy, nothing can be further from the truth.
Why Dropshipping Businesses in Canada Need Insurance
The platform where you sell your products on may require you to carry Commercial General Liability Insurance which is standard coverage for all businesses and can cover medical expenses, property damage, lawyer’s fees, settlements and judgements for lawsuits alleging personal injury, property damage, libel/slander and false advertising. As a dropshipping business, you will also have Product Liability Insurance coverage included with your CGL policy.
Even if you’re not required to carry a CGL policy, if your customers are harmed by the products you sell, your business will likely be named in a lawsuit. If the manufacturer is overseas or their insurance policy will not extend to fully cover your business, which could very likely be the case, then your company is completely unprotected from the cost of litigation.
The good news is that the policies in a dropshipping insurance plan in Canada are tailored to your company’s specific risks and the cost will depend on several factors including:
- The types of products you sell
- How much you sell
- Where you sell your products
- How long you’ve been in business
- Where you source your products from
and other considerations.
Other Coverages your Drop Shipping Online Business May Need
The following coverages can be included in your dropshipping insurance plan:
Property Insurance can cover your office, whether leased or in your home, as well as your computer(s) and other business equipment and supplies. If you need an inventory storage service this policy can ensure it’s protected.
Cargo Insurance did you know that most companies providing shipping services will only cover losses to cargo if the loss was due to their negligence? Or that they will only cover a portion of the value of the goods shipped? Cargo insurance policy protects your investment by providing full value coverage, including profits, as well as protection from a wide range of perils.
Cyber Liability & Privacy Insurance online businesses big and small are a popular target for ransomware, data breaches, and other cyberattacks. Cyber liability insurance can cover those costs and more.
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Don’t wait until it’s too late to get ALIGNED with the right Drop Shipping Insurance plan for your business.
Contact ALIGNED insurance broker to discuss your drop shipping company’s insurance needs, get informed about the types of insurance available, or use our online tool to get a free quote on dropshipping business insurance in minutes.
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