4 Small Business Insurance Mistakes To Avoid For Drop Shippers
If you are starting a drop shipping business, just because you are not storing the products on your own doesn't mean that you don't have any liability. You still have liability as a business owner, and you should still get some form of business insurance. Don't make the four classic insurance mistakes many drop shipping companies make.
Mistake #1: Not Working With An Agent
When it comes to getting insurance for your business, don't try to figure it all out on your own. Instead, work with an insurance agent who has experience with internet businesses. They can help you figure out what policies you need, and they can help you figure out the best insurance companies to work with to cover your needs. They will take the time to get to know about your business, and will provide you with personal advice that will help your business be protected.
Mistake #2: Not Getting Product Liability Insurance
You may not be the one making the product or shipping the product, but you are the one marketing and selling the product, which is why you are going to want to carry product liability insurance. That way, if someone ever comes after you for a defective product or a product that injured them, you will have the insurance coverage that will allow you to fight them in court, or the resources to settle with them. You are the one selling the product, and you are the person people will turn to when they have a problem with the product.
Mistake #3: Not Getting Contingent Business Income Coverage
When you run an online business, you should also invest in a contingent business income or CBI coverage. This type of coverage will help protect you from economic loss due to damage. This can be helpful if your products are damaged or if your base that you work out of is damaged. It can allow you to keep your business going.
Mistake #4: Not Getting a Cyber Policy
When you are running an online business, virtually your entire business model is based on the internet. You are dependent on your website to get orders, and your payment processor to process those orders. A cyber-attack, where information is stolen from you or your website is taken over by someone, can cripple your entire business operations. That is why you need a cyber policy so you can recover if your business is ever targeted in a cyber-attack.
As a small business owner running a drop shipping store, you need to make sure that you are covered from an insurance standpoint. Work with a high-quality insurance agent to find the right business insurance coverage for your unique business set-up.