Why e-commerce businesses need insurance

The intricacies of e-commerce create a complex interplay between a website and its users, especially from a legal and insurance perspective. Both the legal system and insurance providers continue to re-assess their positions vis-à-vis this growing sector of commerce, with new legislation and products constantly proposed to smooth the path of business and consumers.

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30 years ago, the sector barely existed; today, millions of companies buy and sell products online. An e-commerce business faces different risks to a brick-and-mortar company; consequently, anyone setting out in the sector needs to make sure they have an insurance policy designed to cover those concerns.

Financial advice

These risks cross traditional borders, with transactions taking place in the ether and goods and services being transferred around the world. Under these circumstances, a business finance broker in Gloucestershire will face the same issues as his counterpart in New York, Tokyo or Beijing.

In seeking financial advice when setting up a business, e-commerce entrepreneurs should always look for an adviser with experience across the whole spectrum of issues that are likely to affect them, such as http://www.choicecommercialfinance.co.uk/.

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They should also look at the UK government’s advice from the Department for International Trade on these matters, which helps companies looking to export and offers advice on all aspects of e- commerce, including insurance.

Many small businesses will have a standard business owner’s policy covering property and public liability and stock where relevant. As an e-commerce business, you are operating in a completely different environment. The risks are different and while a traditional policy will cover some of these, you need more comprehensive cover and a tailored policy.


An e-commerce business presents unique challenges that only specialist insurance can cover. Two areas are key: business interruption and data security. An online business holds sensitive customer data and business intelligence, and breaches of security are possible. Risk management can help to reduce the chances of such a problem, but are you prepared for your potential liability for each customer’s details?

The issue of business interruption caused by problems experienced by a third party, such as your internet provider, also needs attention. If they experience a problem, it could lead to serious delays for your business and affect your profits. A bespoke policy covering business interruption will help to minimise these losses.

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