eCommerce insurance- Yes or No

[Anonymous]

As I have never had to deal with business insurance before I was wondering if anyone could give me a simple Yes or No Answer to this questions.

I am setting up and ecommerce website which will be run from my home. I wont be holding stock in the house, it will come direct from the manufactuer, all I will be doing is site admin and business admin.... firstly will my home insurance cover this situation or do I need business insurance? secondly I have been chatting to a friend who says I may not need extra insurance, though I'm not sure about this... is he right?

Cheers
-Tom

[Jayne]

Hi Tom,

Depends on your insurance company...give them a ring and ask them, you may be ok under their cover.

Jayne :D

[kyber]

You need to check your policy carefully. Most domestic policies are limited to clerical work only. As you are holding and distributing stock from your home address is would clearly not be just clerical. Even if they allow for this they would probably not cover stock.

Also, you are probably suppposed to tell your mortgage company that you are running a business from home.

The local authority may also have a view on the use of your domestic premises for the running of a business.

Stuart

[Top Hat]

If you are Ltd company, you will need insurance.

If you are a Sole Trader you wont, BUT you may not be covered (Your household insurance may cover your PC, printer etc, but may not!!)

If something goes wrong with a customer and they sue you, you will have no coverage, but now likely is that? particularly when you're just starting out and have no/not many customers.

Finally you may find it a bit of a struggle to find someone to insure you, being online retailer you don't fit many insurers off the shelf packages so they don't want to talk to you (especially if you ship abroard).

[TWD-Tony]

If you are Ltd company, you will need insurance.

If you are a Sole Trader you wont, BUT you may not be covered (Your household insurance may cover your PC, printer etc, but may not!!)

If something goes wrong with a customer and they sue you, you will have no coverage, but now likely is that? particularly when you're just starting out and have no/not many customers.

I THINK that should be the other way around - as a sole trader or partnership YOU are liable for any legal action taken by client(s) - so you should get liability insurance if you are worried about being sued... on the other hand, a Limited Company is a seperate entity in it's own right and is limited to how much it can be sued for by it's assets.

As for insurance - the advice above pretty well sums it up, ask your present insurer if you are covered for the admin stuff (PC, Printer etc) you should be under your normal personal cover anyway but IF they discovered you were running a business from home then they could refuse to pay out on a claim :(

[Top Hat]

I THINK that should be the other way around - as a sole trader or partnership YOU are liable for any legal action taken by client(s) - so you should get liability insurance if you are worried about being sued... on the other hand, a Limited Company is a seperate entity in it's own right and is limited to how much it can be sued for by it's assets.


True, but not what I was trying to get across, its a legal requirement to have insurance if you are a Ltd company (I think). As a sole trader you can choose not to (but it's a risk)

[Anonymous]

Once again, amazing advice from this forum. I spoke to the mortgage company and they (along with the local council) are fine with this as long as there isn't a millon people coming in and out each day.

Sorry if I didn't make it clear, I wont be holding any stock at home as this is coming straight to from the supplier to the client.

Thank you all again.
Tom

[Astaroth]

There is no legal requirement for you to have any form of insurance if you do not have any employees.

It is however something that you should seriously consider. If you are running it from home you will probably need to check your mortgage and home insurance as it may be against the T&Cs by doing this (and not only not covered by your home insurance)

As TED-Tony said, it is very seriously worth considering if you are not going to be forming a limited liability company as you and the company are the same legal entity so if someone was to claim damages against "the company" then your home could potentially be siezed as an asset to pay it off. A limited company is a seperate legal entity so your possessions are safe but your whole company could we wiped out by an "unfortunate incident".

It may be worth speaking to either your own insurance company or a broker to get conformation of what is on offer and get quotes - for a small business insurance is a lot less than many people expect.

[ShiningStar]

Hi Tom,

I hope you're well. I am currently working for a business insurance provider - Constructaquote. The operate by doing an online comparison - giving you a varied list of business insurance providers and their respective quotes.

If you need any further information, please feel free to contact me as I've now gained a good insight of the business insurance industry and would be happy to give you some general advice.

I hope this helps. Good luck. All the best.

[usmanahmed]

don't worry, there are many people running the same business as you such as I personally know some people having printer cartridges related sites. When you consult with any insurance company's representative, he can provide right answer of your questions and about many other web master of e commerce site like you.