Insurance risks of selling online

Has your business started selling products or services online?

Resilience, adaptability, and perseverance are three words we would use to describe how business leaders and entrepreneurs have handled these unprecedented times.

To survive and thrive in this current state, embracing digital transformation has become critical for many businesses. By pivoting their business delivery channels, many have discovered an opportunity to expand their geographic servicing area and client base. As your business evolves, it is important to involve your commercial insurance broker.

Our purpose is to be another advisor and support to your business success. In this, our goal is to ensure your insurance policy continues to cover your operational risk. In addition to ensuring your insurance policy protects you, we also endeavor to ensure you are not investing premium dollars in risks your business no longer has. For example, we have seen some businesses transition out of a brick and mortar shop located on Main street to an entirely digital operation with an inventory storage facility outside the city. Continuing to insure the storefront would not make sense.

While it is important to shore up wasted premium spending, the bigger concern is:

What new risks is your business accepting that your current insurance policy does not cover?

Understandably, this is something many business owners are not thinking about. For them, the shift from selling in a storefront to selling online is simply a shift from selling one way to another.

Consider this simple case study:

A local coffee shop has seen a drastic decline in its in-shop coffee purchases. They decided to add an e-Commerce channel to sell coffee beans and other unique coffee accessories as a way to pivot. Sales start coming in, they start shipping to other provinces and then into the United States. Then they receive an order from Europe. They’re so busy now with online sales; they focus on fulfilling orders as quickly and accurately as possible.

They have a normal series of insurance policies in place, including contents coverage with extensions, crime coverage, and $2 million in limits for their Commercial General Liability package.

This business pivot success story is also an insurance case study waiting to happen. Consider these questions about their insurance policy:

• What does their policy state in terms of territory and where lawsuits are covered?
• Does their insurance carrier insure this type of risk? If they knew the new operation, would they be requesting to get off the risk?
• Is there any coverage that needs to be added or coverage extended?
• How will the current policy handle fraudulent credit card purchases outside of the country?
• Are shipments protected? If so, in what ways?
• Does the policy provide appropriate coverage against libel and slander suits as a result of online advertising?
• Is there coverage to protect against breached client data? Does this coverage expand to protect if the breached data is personal information of American or European citizens?
• Was there any coverage for cyber-related crimes in the policy? If so, is it enough, and is it the right coverage?

If these questions have you spinning already, rest assured knowing we are only a conversation away. Every business is different, and every insurance policy is different. Reading through policy wordings is a job enjoyed by a select few (we are insurance wording nerds).

We read wordings in-depth to ensure businesses have the right protection in place. We love seeing businesses succeed, but it pains us to our core when we hear a business fall due to not having the proper insurance coverage or limits.

If you are a client already and your business operation has changed, make sure your dedicated Account Manager is informed.

If you are not a client of Bryson yet, reach out to our team today for a complimentary discussion to determine if your current insurance covers your operational risk profile. You can connect with me directly at gleyland@brysoninsurance.ca, and I will connect you with one of our business insurance specialists right away.