Whenever you budget the expenses of your business, Shopify Online Store insurance must be high on the list because you can’t always know exactly what can happen in the future.
Need General Liability Insurance for Your Shopify Online Store
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With the protection provided by insurance against accidents and all the other kinds of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.
Like any business owner, for your Shopify Online Store enterprise, you must consider how much financial liability you are taking on.
If your Shopify Online Store business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a complete wipe-out.
This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the consequences of their actions.
In this article, we are giving very general guidelines for small businesses to explain what the main kinds of insurance that you need are, and where we can, a rough guide to how much you can expect to pay.
The question is, can you afford to NOT have insurance for your Shopify Online Store business?
What this means, for any Shopify Online Store business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.
Your Shopify Online Store business is not harbored by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.
In some states, like Montana, there are specific monetary levels that limit the amount a judge can award in any case against the state.
In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have sort.
When you are running your Shopify Online Store operations, you can’t deny responsibility for the results of your actions.
Even more importantly, unless you have spent in advance the money necessary to have your business running as a corporation, all of that liability belongs to you alone.
What does Shopify Online Store insurance protect you from?
For your Shopify Online Store business, the most important sorts of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.
Also there are some legal kinds of insurance that various states require.
In the next few paragraphs, we will describe the most important points any Shopify Online Store business owner should consider when negotiating the insurance needed.
The main categories of insurance for your Shopify Online Store businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.
General liability insurance
Any Shopify Online Store business is dealing directly with customers, and that means you generally have the danger that some accident can happen to them themselves or else something of theirs can be ruined.
In such a case, they can demand compensation.
General liability insurance policy for your Shopify Online Store business covers you against claims coming from injury to customers or damage to their property.
It protects your Shopify Online Store business from the claims themselves and in addition to any resulting court costs and legal fees of the lawsuits.
In many cases, it can also help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.
The average level of general liability insurance for your Shopify Online Store business would be with a upper limit of $1 million for a single event and a total of $2 million for the whole year.
See the table in the costing section below for average prices of general liability insurance for your Shopify Online Store insurance operations.
Professional liability insurance for your Shopify Online Store business
In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Shopify Online Store business for them, you can quickly be involved in a court case.
Even if the matter against you is judged in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.
Every small Shopify Online Store business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.
See the table in the cost of Shopify Online Store insurance section below for average prices of professional liability insurance for your Shopify Online Store operations.
Product liability insurance
Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that what they received didn’t meet your description of function, or that your guidance was basically incorrect.
You need to be aware of the specific laws of product liability in your own state.
For example, in California, all businesses in the supply chain can be held responsible for damages caused by products claimed to be defective.
To cover yourself against any possible lawsuit, you need Product liability insurance for Shopify Online Store
Only you can determine exactly how much insurance you should get.
Best advice is to consult with experienced insurance agents, brokers or company representatives for help.
Commercial vehicle insurance for your Shopify Online Store business
Be careful! – practically all policies for private vehicle insurance do not cover any happening like theft or accidental damage when the vehicle is being used for business purposes.
The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.
Commercial truck policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.
In addition, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is covered if your truck is involved in a collision.
Most states, other than Virginia and New Hampshire, mandate this type of insurance.
The required value of the insurance is worked-out for the depreciated value of the vehicle, and your requested level of cover of contents.
Tools and Equipment insurance
Since your Shopify Online Store business needs specialized and costly equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.
The tools may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.
Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.
Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy everything needed to keep your Shopify Online Store business running.
It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Shopify Online Store business’ equipment.
Commercial Property insurance
Any Shopify Online Store business that owns or rents space in a building needs a commercial property insurance policy.
If you own the building, you probably have a substantial capital investment, as well as a big liability if there’s a mortgage.
Every physical building location must carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against deliberate damages like theft and vandalism.
If your Shopify Online Store business works in areas of high risk, like Florida or North Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.
In other states like Illinois, where unlimited cold snaps can cause damage to outer coverings of Shopify Online Store business premises, there is a need for more additional cover than in warmer climes.
Although the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Shopify Online Store insurance section below to give some idea of the average prices per million dollars of property insurance for your Shopify Online Store business.
Temporary insurance by month, week or day for your Shopify Online Store business
Is your Shopify Online Store business working part-time or casually, or is the level of business fluctuating?
Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Shopify Online Store – are special policies where you can cover a specific period when you want to be covered.
By only paying for that period of cover, you will save by having lower premiums but still having the same risk cover.
The important feature of short-term insurance is that you purchase the cover for a defined period – a specific date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.
When you are expecting periods of larger business activity, get the existing cover increased.
Talk to your insurance agent, broker or the company’s representatives to see what options you have.
Business Owners Policy BOP for your Shopify Online Store business
You have the option to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.
A BOP merges commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.
BOP insurance will protect you if any claims of injury or property damage are made.
It is mostly the right choice for small and medium-sized Shopify Online Store businesses, such as yours.
There are a few limits that will determine whether BOP is suitable for your own business.
BOPs do not cover your professional liability or commercial vehicle cover.
Also, the size of your business will rule whether you are permitted to take out BOP cover.
The typical business that is eligible for a BOP policy must have no more than one hundred employees, and not more than five million dollars in annual revenue.
Plus, you must separately take out the required worker’s compensation, health and disability insurance as determined for your state.
Workers Compensation insurance for your Shopify Online Store business employees
In almost all states, it is mandatory to have workers compensation insurance when your Shopify Online Store business has one or more employees.
Workers compensation insurance covers the enterprise against any costs that arise if a worker experiences an injury or becomes sick as a result of work.
The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.
Failure to meet a state’s regulations in this regard can leave you as the employer having to pay penalties levied by the states.
Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.
In these states, you can’t obtain your workers compensation obligations from private insurance providers.
Workers compensation charges are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.
However, you must refer to the relevant authorities in your state.
Average costs of these types of insurance
Although every Shopify Online Store insurance requirement is unique, there are enough examples of average quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.
Of course, you should always check with an insurance representative what’s relevant for your business.
The list below is of annual premiums we have gathered for the main types of insurance your Shopify Online Store businesses needs.
|Types of insurance||Price range|
|Commercial vehicle insurance||$1845 – $3390|
|General liability insurance||$660 – $885|
|Product liability insurance||$290 – $790|
|Commercial insurance||$850 – $2610|
|Equipment insurance||$490 – $1420|
|Public liability insurance||$380 – $605|
Cost of insurance for your Shopify Online Store operations depends on many different factors.
We have estimated these figures for small freelance Shopify Online Store businesses.
In larger states like California, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Utah, they will be about 20%-30% lower.
The location and size and type of your Shopify Online Store business can have a big effect on the cost of different policies.
You should consult with professional insurance agents and brokers, or insurance company representatives.
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In addition you can let the internet do the work for you by enquiring about insurance companies near where your business is located.
Another good source of information is the local Better Business Bureau in your city.
What is small business insurance for Shopify Online Store operations?
This is a general term used to describe common insurance policies designed to protect Shopify Online Store business owners from risks like bodily injury, property damage, claims of negligence.
Does my Shopify Online Store business have to have insurance?
Some of the forms of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.
Several other forms are required by state law, such as workers compensation and vehicle insurance.
What does a small Shopify Online Store business insurance policy cover?
Liability insurance provides coverage against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.
The specific cover will vary based on your own operations.
See the table in the costing section above for average prices of the recommended policies for Shopify Online Store insurance.
How much will Shopify Online Store business insurance cost?
In addition to the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.
You should discuss with professional insurance agents and brokers, or insurance company representatives.