Last week, a California court ruled that Amazon can now be held liable in their state for faulty products that are sold to consumers. This is something that the company has fought off for years due to the fact that products on the Amazon marketplace aren't necessarily always manufactured and sold by their company. The Amazon marketplace, home to millions of third-party sellers, now accounts for 60% of Amazon's e-commerce sales.

Previously, Amazon only required General Liability insurance policies for their "pro" sellers, but did not require this for all sellers on the marketplace. Now that they are being held liable as they are a part of each sellers' channel of distribution, it will be no surprise if the seller insurance requirements change. 

There isn't a one-size-fits-all e-commerce insurance policy as each online business is very different. We've broken down the main types of insurance policies to help you decide what coverage is best for your business.

General Liability: This is the most basic form of business insurance and protects your company's assets as well as protects you financially from losses due to injury, negligence and accidents that could occur. Every business should get a general liability policy, even if you feel you are low risk. The small monthly payment is nothing compared to what you could face if you did not have a policy.

Product Liability: Product liability is usually included with a general liability policy. This provides protection in the event one of your products was to cause bodily injury or property damage to a third party due to a defect or malfunction.

Umbrella (Excess Liability): This covers expenses that exceed your general liability policy. For example, if you are being sued for $1.5 million over a product lawsuit and your general liability policy is only for $1 million, your umbrella coverage will handle the additional $500,000 that you would be paying for out of pocket.

Cyber Liability: If you are receiving or communicating any information electronically, cyber liability is incredibly important in protecting you from the outcome of data breaches. Cyber liability policies are also critical if you are accepting payment online. To read more about the importance of cyber security and how to protect yourself and your business, read our past article for tips and tricks on managing your business virtually.

Ocean Cargo: This may be coverage your smaller online business doesn't currently need, but if your business is on the trajectory for growth, it's a policy to always keep in the back of your mind. Ocean cargo protects the shipment of goods via air or ocean, should those goods be damaged or lost in transit.

It can be tricky to decide which insurance is best to protect your online business. We're here to help. Click the link below to fill out a few pieces of information and request a quote.