E-commerce and Online Retailer Insurance

Yes, e-commerce retailers face theft risks from both outside criminals and insider fraud. There are two types of business insurance policies to include in your retail risk management plan:

• Commercial property insurance covers stolen or damaged inventory, equipment, and other business property. Whether you're operating from a rented space or working from home, this coverage helps replace burglarized or damaged business property. Property insurance is often bundled into a BOP with general liability coverage.
• Fidelity bonds, also called employee dishonesty coverage, reimburse losses if an employee or contractor steals money, inventory, or other assets. For example, an employee might forge a customer's signature or conduct an illegal electronic funds transfer.

Combined, these policies help safeguard your inventory from burglary, shoplifting, or package theft, as well as protect against financial losses caused by dishonest employees or contractors. For broader protection, you can also consider commercial crime insurance.

Cyber insurance is a key coverage for any business operating online, protecting against financial losses from hackers, data breaches, and other cyberattacks. For e-commerce retailers, it can help cover costs related to common threats like phishing scams, ransomware, cybersecurity attacks, and stolen customer data.

Coverage typically includes:

• First-party coverage: Pays for expenses such as customer notifications, credit monitoring, data recovery, and extortion payments. It’s vital for any e-commerce business that handles sensitive customer information.
• Third-party coverage: Offers protection to small businesses if they're responsible for a client's online security and fail to do so. This policy would pay for your legal defense and settlement support if customers or clients sue your business following a cyber incident at their business.

Many insurance options also include data breach coverage to address the specific costs of recovering from a breach. Together, these protections can help your ecommerce company recover quickly while minimizing financial and reputational damage.

Beyond general liability and cyber coverage, several specialized policies help protect digital and e-commerce businesses from common risks:

• Business income insurance, also known as business interruption insurance, covers lost income and extra expenses if your business operations are disrupted—such as equipment failure, cyberattacks, or natural disasters.
• Equipment breakdown coverage pays to repair or replace essential tech (like servers or POS systems) if they fail due to electrical or mechanical issues.
• Electronic data processing insurance, or EDP coverage, protects hardware, software, and data from perils like power surges, fire, hacking, or hardware failure.
• Inland marine insurance covers business property, like laptops and inventory, while in transit or stored off-site—risks usually not covered by standard property coverage.
• Hired and non-owned auto (HNOA) insurance protects your business from liability if you or your employees use personal, leased, or rented vehicles for work-related tasks and get into an accident.