Does My Online Business Need Insurance? - NYCM Insurance Blog

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May 1, 2023

Does My Online Business Need Insurance?

Starting up your own online business is an exciting endeavor with seemingly endless possibilities. As we become more immersed in the digital age, online businesses have become an increasingly viable means of generating income. Whether you’re starting a product-based business or service-based business, you may have some questions about what’s required in order for you to get your online business operating in a profitable and safe way, like, “Do online businesses need insurance?”


The answer to that question may depend on what kind of online business you’re starting, but business insurance should be considered by every business owner who wants to protect their property and profits against unforeseen events. Additionally, liability coverage can help prevent a business owner from incurring financial losses if something related to their online business leads to a lawsuit. Continue reading to learn more about business insurance and whether it’s needed for your online business.


What is Business Insurance?


Business insurance, otherwise known as commercial insurance, offers various coverages for your business, including the business’ property and profits. Many insurance companies offer a Comprehensive Business Owner Policy (BOP), which offers broad coverage and is designed to protect your business from a variety of risks.


A Business Owner Policy provides Business Property, Business Income, and Commercial General Liability coverages. By purchasing a Comprehensive BOP, a business owner can gain protection against property damage, loss of business income, and general liability suits, thus affording peace of mind and the opportunity to go back to focusing on the day-to-day matters of keeping their business running smoothly.


Does My Home Insurance Policy Cover My Online Business?


Because online businesses are often run out of one’s home, some may assume that an online business is automatically covered under one’s home insurance policy, and as a result business insurance isn’t necessary. But this is not the case; it’s important to note that while a home insurance policy protects your home, it may not protect certain aspects of your business within your home. In fact, your home insurance may even exclude business activities and business property.


Professional equipment, products and inventory, internal files, and customer data are a few examples of things in an online business that may not be covered by a home insurance policy. Additionally, if something were to happen to your home that prevents your business from operating, the income you stand to lose by remaining closed would not be covered by your home insurance.


Why Should I Insure an Online Business?


Business insurance offers a safety net for your business against certain situations that can negatively impact your bottom line or prevent your business from operating. Usually the purpose of running an online business is to turn a profit, and while you may be looking for ways to cut expenses to help serve that mission, purchasing business insurance is an excellent way to protect your business against events that could otherwise be detrimental to its financial success.


Among other things, business insurance can offer coverage for…


           Property and inventory damages

           Data breaches

           General liability suits

           Loss of business income


Without the right kind of coverage, an unforeseen event can turn a profitable online business into a money pit. There can be no way to know when an event will occur, be it a power outage, cyber threat, house fire, or otherwise, but purchasing business insurance can give you the peace of mind that your business is covered for if or when it does. Click below to contact an agent and discuss coverage options for your online business today!