As an online retailer, managing risks associated with the products you sell is crucial to protecting your business. Product liability insurance for online retailers is an essential part of this. It protects if a product causes injury or harm to a customer or damages their property.
In 2025, global ecommerce sales are forecast to rise to $6.56 trillion.1 In the rapidly expanding world of e-commerce, customer expectations are high and competition is fierce. Online retailers insurance cover ensures you’re prepared for any product-related incidents.
Why do online retailers need product liability insurance?
With the constant handling of products, from sourcing and storage to selling and shipping, online retailers are exposed to potential liability if something goes wrong. A product you sell may be defective or injure a customer. It could also cause third-party property damage. As a result, your business could face costly claims and legal fees. Product liability insurance cover protects your business against these risks. It covering legal defence costs, settlements, and any damages awarded.
Product liability vs. public liability insurance
Public liability insurance cover is another crucial protection to include in your policy as it protects your business if a customer or third party is injured on your premises or due to your activities. Product liability insurance, on the other hand, specifically covers harm caused by a product you sell. Both are essential parts of online shop insurance. Together, they provide complementary protection, ensuring your online retail business is adequately covered.
Additional insurance for online retailers
As well as product liability, there are several other types of online business insurance cover. These are essential for online retailers to consider adding to their policy:
Employers liability insurance
This is required by law if you have people working for you.2 It covers claims made by employees who may suffer injury or illness because of their work. This is especially relevant if you handle products that require storage or packaging, for example, where there may be a higher risk of injury.
Stock and business equipment insurance
Many online retailers rely on equipment like computers, printers, and other technology to manage their stores. Business equipment insurance protects these valuable assets against damage, theft, or breakdown. This allows you to continue operations without financial strain. Stock insurance can cover losses due to theft, damage, or unexpected events. This is especially crucial during high-demand or seasonal periods.
Cyber Insurance
In today's digital landscape, cyber insurance has become an essential component for online retailers. With the reliance on technology and the internet for business operations, the risk of cyberattacks, data breaches, and other online threats is ever-present. Cyber insurance provides coverage for the financial losses associated with these incidents, including costs related to data recovery, legal fees, and notification expenses for affected customers. As e-commerce continues to grow, so does the potential for cyber threats, making it crucial for online retailers to safeguard their sensitive information and maintain customer trust.
In summary
Comprehensive online retailer insurance cover will protect your business against various risks. Investing in online shop insurance, including product liability insurance cover and other key covers, is prudent. It allows you to confidently run your online retail business and tackle any challenges that may arise. You’ll be able to focus on growing your online business without constant worry about unforeseen incidents.
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