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Do I Need Commercial Insurance if I Only Sell Online? Answers from a Bedford Agent

 

With the widespread availability of the internet, it is not always necessary to have the overhead of a brick and mortar store in order to run a successful business.  Many Bedford residents sell goods online from handcrafted products to baked goods, consultation services to contracting.  Not having a physical storefront can be a great way to cut costs, but one area that should not be cut is commercial insurance. 

Commercial Property Insurance

Whether your store your stock, tools or materials at home or in a warehouse, if these items become damaged or stolen, your business's bottom line would feel the consequences.  Not only would you not be able to sell these items, you may owe customers refunds for items that have not shipped yet as well as a delay in fulfilling future orders. 

Perhaps you think your homeowners insurance will cover this property if it is stored in your Bedford home, but most personal policies will not.  Homeowners insurance provides very little coverage for business property even if stored in the home because it is better covered elsewhere.   To protect your business property, you need commercial property insurance.  This type of commercial insurance can cover not just your supplies, tools and inventory; it can also cover the property used to operate your business such as computer equipment, printers, etc.

Commercial Liability Insurance:

Many home-business owners also believe that their homeowners policy would cover them should there be a liability claim stemming from their business because they work from their Bedford home.  This is not correct.  In fact, most home policies specifically exclude coverage for liability stemming from any business activity.  This means that there would not be any personal liability coverage should a customer sue you, or if the UPS driver slips and falls making a delivery to your business.

A possible solution to this gap in coverage is a commercial liability policy which can be packaged together with the commercial property insurance.  Commercial liability insurance may help defray the expenses of a covered claim with not just the settlement, but also the defense cost.

Other Critical Commercial Insurance Needed for Your NH Online Business:

Cyber Liability Insurance: Running a business online means you are extremely vulnerable to cyber-crimes.  Hacking into your system may be easier than you think, allowing thieves to access not just your sensitive information, but also the sensitive information of your clients.  If this happens your business will be held liable for the damages sustained by customers which is averaging more than $500,000 for small businesses.  To protect your reputation and business NH cyber liability insurance is a critical tool for keeping your business going.

Products Liability Insurance:  Whenever you sell a product, especially an item you have made or repaired, you can be held responsible for any injures that are caused by your product.  With legal expenses, fines and more, these costs can quickly mount.  Products liability insurance is a policy that can help cover this risk.

Professional Liability Insurance: Just because you don't sell a product does not mean you can not get sued.  Anyone rendering professional advice including consultants are at risk of being sued if the advice they give, or perceive to have been given, causes harm to someone. 

Loss of Income:  If your on-line sales business provides you income, what would happen if that income were to suddenly stop due to a fire or other covered event?  Loss of income insurance could help fill the gap when you are working to get your business back on track.

Workers compensation: If you have any employees, full-time, part-time or even occasionally, you are required by law to carry workers compensation insurance.  This is regardless of whether you work from your Bedford home or not.  The penalties for not carrying workers compensation insurance should an employee be injured are severe so make sure you speak with an insurance professional about your options.

You have worked hard to build your business but don't let the fact that you don't have "an office" confuse the issue.  You need commercial insurance.  Property damage, lawsuits and cyber crime could force you to close your business, hurting your income and reputation.  If you run a business in Bedford selling goods online, take the time to learn about the financial risks and how commercial insurance can protect you and your business.

This material is for information only.  All statements herein are subject to the provisions, exclusions and conditions of the applicable policy and state law.  For an actual description of all coverages, terms, conditions and applicable laws refer to your specific policy and appropriate governmental agency.

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