Online business has become big business in Ontario over the recent years.
In 2022, 75% of the Canadian population was an e-commerce user (1), and around 5.5 million online stores are using Shopify a Canadian platform. (2)
If you’re operating an online business in Ontario, getting the right small business insurance is a smart move.
TYPES OF ONLINE BUSINESS INSURANCE TO CONSIDER
You’ll want to focus on the specific risks of operating a digital business, such as technology errors, cybersecurity breaches and product liability if you sell physical items via e-commerce. Let’s take a closer look at some of your insurance options.
Cyber Liability Insurance
Cyber liability insurance is essential for an e-commerce business because it protects against data breaches, hacking, ransomware and privacy violations.
The best way to protect your business from these common risks is to minimize their risk (e.g. backup all files, install malware protection, practice strong password habits); however, in the event these measures fail, you’ll thank your lucky stars you’re covered with cyber liability insurance.
Errors & Omissions (Professional Liability)
E&O insurance is especially important for service-based online businesses such as consulting, coaching and digital marketing services.
This covers legal costs if a client alleges your advice or work caused them or their business harm.
Product Liability Insurance
If you sell physical goods (e.g. dropshipping, handmade items), this covers damage or injury from defective products.
Commercial General Liability Insurance
CGL covers third-party bodily injury, property damage, and personal/injury liability (e.g. a customer slips on your packaging).
Learn more about liability insurance here.
Commercial Property / Office Coverage
If you use a home office, a rider may extend protection to your business equipment such as computers, servers and other hardware.
If you have questions about these or any other insurance products, please contact us anytime, and we’ll be happy to help to insure or point you in the right direction of an insurer that offers the protection that you require.
HOW MUCH DOES INSURANCE COST FOR AN ONLINE BUSINESS?
While final insurance premiums depend on your business size, revenue, and coverage levels, here are some ballpark numbers to give you a general idea:
- Liability insurance only: $500 – $1,200
- Liability + Cyber: $900 – $2,000+
- Liability + Cyber + Product Liability: $1,200 – $2,500+
These numbers are projections; actual rates will vary depending on your business specifics. Get a quote for business insurance here.
HOW TO GET YOUR ONLINE BUSINESS INSURED
We recommend these steps:
1\ Assess Your Risks
Are you selling products? Handling customer data? Providing digital advice?
2\ Get Multiple Quotes
Contact 2-3 insurance providers, especially those familiar with e commerce and cyber policies.
3\ Compare Quotes Carefully
Look beyond price. Evaluate things like:
- Coverage limits (e.g. $1 M vs $2 M)
- Deductibles
- Retroactive coverage periods (for cyber policies)
- Included services (e.g. incident response, legal support)
4\ Bundle When Possible
Many insurers offer multi-line bundles that reduce overall insurance costs.
5\ Review Annually
As your online business grows and changes, update your insurance coverage. More revenue or digital risk may require policy upgrades.
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.
SOURCES:
1. International Trade Administration
2. yaguara.co
