A traditional business owners policy, or BOP, will typically provide insurance coverage for property, liability and income. The emergence of e-tail and other virtual world companies has made e-commerce business insurance for damage and loss more complex for insurers and owners alike. Larger companies may have the capital and flexibility to be able to tweak traditional policies to serve their internet ventures. Small business and start-ups may be better off investigating a stand-alone e-commerce policy.
Information for the Agent
In order for the insurer to assess risk, new companies or businesses up less than three years may be required to provide detailed information when applying for e-commerce business insurance. In general this list includes:
- Background, experience and qualifications relating to the type of business
- Financial history
- Current financial profile, including assets and profit and loss statements
- Third-party vendors such as server host, payment processor, fulfillment house- any contracted company that the operation relies on to do business
The insurer will come up with the right coverage relative to the risks inherent in running the business.
Questions for a Prospective Agent
While it is not strictly necessary for an agent to be an expert in every detail of e-commerce risk, it helps for the agent to have some level of experience with internet-based business. Be sure and ask a potential insurer what range of specialty products are available through the agency.