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A guide on how to get Shopify business insurance

There are many reasons why Shopify store owners should consider their need for Shopify business insurance. Although Shopify does not require you to have eCommerce liability insurance like Amazon, that doesn’t mean it’s not necessary. No matter what you sell or where you sell, liability insurance for eCommerce will allow you that extra level of security when selling online. As eCommerce is growing to new heights, so are the possibilities that something could go wrong. From the moment the customer completes his purchase to the moment the package lands at his door, the possible scenarios are endless and could include damage, loss, or even theft

Whether you have decided to go ahead with Shopify insurance or still debating whether it’s necessary for you, through the following questions, we will explain why Shopify insurance is so important and how to get insured: 

 

 

Table of Contents

What is Shopify?

Simply put, Shopify is an eCommerce giant and considered the best eCommerce platform for small businesses. In fact, if you are considering selling on Shopify but are not yet entirely convinced, you will find that you are in very good company as Shopify houses close to two million stores on its platform. Shopify holds almost 20% of the market share for online retail shopping platforms and aims to be “the world’s first global retail operating system” in today’s rapidly growing eCommerce world. One of Shopify’s main benefits is its security and reliability as an online seller. Shopify promises 99.8% uptime (the number of hours a website is up and running, and available for its users to access) meaning that your store can be reached by potential customers from anywhere at any time and all in your secure SSL-certified store. 



Why is Shopify business insurance so important?

Although with Shopify you may be in safe hands, some issues simply cannot be foreseen or controlled,  and “could happen to anyone”. 

If someone makes a purchase from you, this transaction automatically makes them your customer and you accountable. If your customer makes a complaint, you will be the one who needs to deal with it. Not only that, you will be accountable for legal actions, compensation, or other otherwise avoidable costs. Simply put, Shopify business insurance reduces the risk to your business. How will eCommerce insurance help you?

  • It protects you from claims involving bodily injury or property damage.
  • It protects you from a faulty product you designed, manufactured, or supplied.
  • It protects your business from global supply chain chaos.
  • It protects you from theft, loss, and damage of your inventory – in your warehouse or in transit.
  • It supports you with legal costs when going to court, including cases that happen as a result of data breaches.

Shopify insurance will not only protect you from potential financial burdens. Liability insurance for eCommerce increases your ability to handle a mistake and keep your customers loyal. 

  • For example, if you have supplied a pair of jeans to a customer and they haven’t received them, with liability insurance you won’t be losing money on that loss and can send out a replacement with a lot less hesitation. This is important as “40% of shoppers are unlikely to give retailers a second chance after a poor delivery experience.” A poor experience will not only reduce the chance of them buying from you in the future, but it also can lead to a poor review, which is something that should be avoided at all cost. 

Bottom line – Liability insurance can be the difference between an unfortunate situation with a fortunate outcome and having to close your store shutters for good and calling it a day. 

Insurance for Your eCommerce Business

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What do I need to do to get eCommerce liability insurance?

So you’ve made the decision to get eCommerce business insurance. Good move! The following steps are straightforward and will result in insurance coverage with little difficulty and in no time:

  1. Evaluate your risks – Every product has its own risks. Whether you are selling trampolines or antique jewelry, the risks placed on both these categories vary greatly. Assess your risk by answering the following questions:
  • What kind of accidents, hazards, disasters or lawsuits pose a risk to my business?
  • Do you have employees?
  • Do you store your inventory in a warehouse?
  • Is your business home-based?
  • How do you transport your product?
  1. Choosing the policy your business needs –  Based on the above risk assessment you will be able to determine which eCommerce insurance policies are right for your business. The overall recommendation is to start with a basic policy. For most small eCommerce businesses, general liability and product liability coverage are a good start. 
  2. Get to know your options – Now that you’ve decided what Shopify business insurance you want, it’s time to get quoted. These are the most common options for getting an insurance quote:
  • A broker – This is a kind of “insurance agent”. He makes a commission off your insurance purchase and may even require you to pay a  “broker’s fee”.
  • An online marketplace – A faster solution for getting insurance. The marketplace will present you with multiple insurance policy options based on the information you provide them with and your business needs. 
  • Working directly with an insurance provider – If you know which insurance provider you want, you can simply approach them directly and ask them for a quote.

The second two options are usually easier for eCommerce businesses as they often prefer a more hands-on experience that is tailored to your business needs. 

  1. Chose a provider – Based on the quotes you have received you are now able to make a smart and informed decision of which insurance provider is right for your business. Assess the following factors: 
  • Policy coverage
  • Liability limits
  • Costs and terms
  • Provider reviews and complaints
  • Customer service
  • Premium and deductibles
  1. Buy and get familiar with your policy – Now that you know which provider you will be working with, you are ready to make the purchase. Once you have everything set up, get to know your coverage: Learn how to set up your account, how to make a claim, how to contact customer service, and how to get a certificate of insurance (COI) and other features of your policy. 
  2. Stay up to date – Most policies should be renewed yearly. Make sure to evaluate your risks, assess your needs and change your policy when necessary. 

Getting liability insurance with Spott

When getting insurance with Spott, there is a lot less demand on you as Spott will save you the hassle of the two first steps. In just under a few clicks and a few short steps, Spott completes the risk assessment for you and based on that provides you with the policy that is tailored to your business’s needs. With no broker fee or extra hidden costs, you will be provided with policy options at an affordable price. 

These are the steps to get insurance with Spott: 

  1. Set up your account. It’s never been so easy as only your email is required.
  2. Select the product you would like to purchase. In this case, liability Insurance.
  3. Choose the platform where you will be selling your product. In this case, Shopify. 
  4. Provide your store’s URL.
  5. Provide some personal details, such as your name, address, and phone numbers,
  6. Put in your business address. 
  7. “Connect” – This is where Spott studies the information off your store. This means that there is no need for paperwork or documents that most people don’t have easy access to. 
  8. This step includes a few simple questions regarding your product – questions like “What is your estimated gross revenue in the next 12 months” or “have you been insured in the past?”
  9. The last and final step – here you are provided with various quotes for insurance policies. 

Tada! That simple. 

Once you have received the quote, an insurance expert from Spott will get in touch with you to finalize your insurance policy, and then you are all set!

When working with Insurance brokers or other online marketplaces they often don’t provide the best and most suited quotes for eCommerce businesses. Most insurance providers are not familiar with the ins and outs of eCommerce and the risks and demands of online businesses. This often results in online sellers buying an insurance policy that is not right for their needs, which can be a disaster waiting to happen. When choosing Spott for your Shopify business insurance, you are provided with the right knowledge, expertise, and experience to help find you the best eCommerce business insurance for your store.

How do I get my certificate of Insurance (COI)

A COI is a document provided by your insurance provider stating that your business is insured. The COI contains pieces of information such as:

  • The persons and property are covered.
  • The coverage amount.
  • Deductions.
  • Exclusions.

On a platform like Amazon, it is mandatory to provide this certificate to keep your store open. On all other platforms having a COI will keep you protected from any potential risks of getting sued and other financial harm. 

 

So if you’re still asking, “does my Shopify store need insurance?”, the answer is a definite YES! Incorporate it into your business plan and make it a priority, because Shopify business insurance is the most important way to protect your Shopify store. For more information or guidance on how to get insurance for your Shopify store, get in touch with Spott and they’ll assist you on how to secure your eCommerce store in no time.



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