The human toll of the global COVID-19 pandemic has been severe and shows no signs yet of abating. The economic toll on brick and mortar businesses, especially in the service industry, has been huge also. Across the country, as millions have lost their jobs and have been forced to go on unemployment, disposable income has been reduced. Some industries like restaurants, luxury goods and the travel sector have been decimated. However, even in this troubled economic landscape there have been some bright spots. As people hunkered down and practiced social distancing many pockets of the eCommerce sector have been rising. Amazon, online groceries, streaming services have been seeing substantial increases in business and even some of the reduced apparel sales from brick and mortar operations have been partially mitigated by increased online sales. Even Etsy, the hub of handmade craft items has seen healthy growth over the past few months. But this landscape could change quickly.
Perhaps the COVID-19 wave will subside to more manageable levels and pent-up demand will goose the economy back to a healthy upward trajectory. Conversely, the advent of cooler weather in the northern hemisphere and the onset of the normal flu season could return us to another round of government mandated shutdowns. A key expense of any business is its insurance portfolio. Businesses have a wide range of insurance products at their disposal to help manage risk. If you’re in the Ecommerce business it might be a good time to look at your insurance coverage and make sure that your policies are properly calibrated to the new environment. Sites like americaninsurance.com can help you navigate the right coverage for your Ecommerce operation.
Here’s What You Need To Consider:
Business Interruption Insurance
Business Interruption Insurance is often a part of a business’ property insurance policy, but is can also be acquired as a stand-alone product. This type of coverage is designed to protect a policy holder from lost income resulting from a temporary closure of the entity due to external events such as fire, storm damage, etc. More often than not, however, events such as the COVID-19 pandemic are excluded from coverage. The CPA Journal reports that “successful claims under business interruption coverage for infection are not common”. Every holder of a business interruption policy should consult with their broker to make sure they fully understand the inclusions and exclusions of their policy.
Cyber or Data Breach Insurance
Even before the COVID-19 outbreak, Ecommerce sites were a tempting target for cyber criminals. Data breaches, denial of service ransom attacks and the like are increasingly common – the FBI has reported almost a half million reported cyber crimes in 2019. As Ecommerce sales rise in many sectors, it could accelerate the incidence of hacking attacks. If you run an Ecommerce business, the last thing you want is for your customer’s data to get into the wrong hands. If you already have Cyber insurance, great! But, now might be a good time to re-examine if your coverage levels have kept pace with any sales increases you’ve seen. If you don’t have Cyber coverage, consider talking to your insurance broker and see if it makes sense to add it to you insurance portfolio.
Product Liability Insurance
If you are seeing increased Ecommerce sales due to a COVID-related shift of shopping habits from brick and mortar store to online stores, you may see this as an opportunity to expand your product line. If so, make sure that any new products you offer will be covered under your existing product liability coverage (you do have product liability coverage, right? RIGHT?). Talk to your broker to make sure that your insurance is properly aligned to your product lines.
Technology Errors & Omissions Insurance
If your Ecommerce business provides services rather than goods, you probably want to carry a Technology Errors & Omissions policy. Tech E&O covers you for failure of your software or tech infrastructure and if you are seeing a COVID-related increase in online sales, make sure that you are adequately protected.
If your Ecommerce business requires the shipping of goods to your customers, you will probably want Cargo insurance if it’s not already in your portfolio. Cargo insurance, as its name implies, helps protect against losses or damages to your inventory as it moves between supplies, distribution centers, warehouses and customers. If you are either scaling back or adding to your product lines in response to the current economic conditions, make sure you monitor the details of your policy. You don’t want to over pay for more coverage than you need or, if business is increasing, you want to make sure that your coverage expands accordingly.
Ecommerce Order Fulfillment
Floship is an Ecommerce Order Fulfillment provider based in Hong Kong. Shipping orders worldwide itself is a challenging task, made even more challenging because of the restrictions and lack of shipping capacity caused by COVID-19. If your Mid-Market Ecommerce Business is facing logistics challenges for the upcoming holiday season or beyond, Floship may be able to help. Hong Kong has not seen the amount of cases the Western world is currently struggling with, facilities and processes have continued to run smoothly and continue to do so. With our many different courier choices and shipping options, for instance Direct-to-consumer shipping (D2C), you can still promise your customers to deliver within days. Reach out to Floship for a solid shipping strategy:
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How Floship Helped Tushy Meet a Huge Spike in Demand at the Peak of COVID-19
The Back Page:
The COVID-19 pandemic has dramatically impacted the global economy. But eCommerce has seen many pockets of prosperity among the wreckage elsewhere. Whether you’ve seen an increase or decrease in your eCommerce business, it’s important to keep you insurance coverage aligned with your current business model.