Liability Insurance for E-Commerce Companies

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Hey Gang,

We are currently in the market to renew/obtain our general liability policies for our corporation. We are in e-commerce biz, of course, and need to keep protection in place from crazy lawsuits or customers.

Many people may not realize that a number of the major marketplaces (Amazon, Rakuten, BestBuy, etc) have a clause in their Marketplace Reseller Agreement that *requires* a seller to have a certain amount of liability coverage. This protects us, but also protects them.

Anyway, the reason for my post is I'm wondering if people can comment on good carriers or companies to use. Is there a company out there that specializes in underwriting e-commerce-oriented companies?

Most of the carriers that quote policies through your everyday insurance brokers look at gross sales and premiums can be crazy high. They don't understand that in many cases, especially with dropshippers, the net sale and profit % is quite low, as compared to gross sales.

I am going to post this on Amazon Seller Support forums as well. I would think there may be some companies out there that specialize in insurance and liability for e-commerce folks.

Hope to get some comments here ... are you covered? Who do you use? Are you comfortable sharing premium amounts?

Let the dialog begin.
#companies #ecommerce #insurance #liability
  • Profile picture of the author wmrwl
    I had that problem as well. You're better off finding a small local insurance broker who can find you the best rates.

    Try buyerzone.com or something like that and local businesses will buy your lead and contact you with quotes.
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    • Profile picture of the author fmckinnon
      Yeah, I've got two local brokers working it up right now. It's just tough because they have a million questions and struggle to grasp the concept of what we do, and the various details of it, then when they finally have enough information, the actual carriers take forever because they aren't familiar w/ it either.
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  • Profile picture of the author wmrwl
    Part of the reason they take forever is because they make very little from this type of policy. Keep calling them back at least once a day to check on it.
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    • Profile picture of the author fmckinnon
      Yeah - and you realize they can sell you a product for everything imagineable:
      General Liability $2M - sure, no problem .. but also, Error/Omission, and also, Umbrella, and hey .. you're online, what about Cyber Insurance, in case someone hacks your site, blah, blah, blah .. I guess they have a job to do, right?
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  • Profile picture of the author kjamesnv
    Will a general liability policy work? If so they aren't that expensive.
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    • Profile picture of the author OnlineStoreHelp
      You should be able to get a simple Business Package policy for less than $1,000 a year. This will include G/L, W/C (if you need it) and an auto policy from a commercial underwriter. Don't go to your personal insurance guy. This will probably provide an excess umbrella of 1 to 10 million on top of it.

      What most BOP's won't cover are your Errors and Omissions (advertising injury will be about the extent of it) or network liability issues when it comes to your package policy. Those will be separate cyber policies that few companies underwrite and a lot of the packages out there provide very little coverage.

      Instead of trying to buy a cyber policy you are better off spending that money putting in place a breach plan for when you have a privacy or network breach. It can make a huge difference between your perception and loss of sales. Just ask eBay and Target what poor planning can mean.

      A lot of contracts have those clauses but its a nightmare for them to collect certificates of insurance to show proof so they put it in there but it is essentially, not enforced.
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  • Profile picture of the author ddomingu
    Hi, if you are in California I can help you find the right policy. PM me
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  • Profile picture of the author keyideas
    Linkpayroll holds Professional Insurances. We provide Employers Liability, Public Liability, Professional Indemnity insurances under your own Limited Company
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  • Profile picture of the author KenW3
    We went with Insurance Office of America many years back. You can find them at IOAUSA.com to get a quote. They will assess your needs, then shop for your best rates through the companies they represent.
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