Risk & Insurance
Running a business online
Ensure you have the right cover for your online business

The digital age is no longer the future – it’s here, now. With this, the growth of many online businesses has emerged.  And if the trend wasn’t prominent enough, a global pandemic and resulting lockdowns have exponentially accelerated this growth.

If you are running your business purely online or thinking about opening an online business, you might be thinking insurance is a step you can skip. In reality, there are still many events for which you may need cover for. Here are a few of those instances:  

1. You own office equipment

You might not have a typical business or office premise, but it’s likely in order to run your business you have at least a laptop, mobile phone and/or tablet, and you know just how much these would cost to replace if they were stolen. While they may be covered to some extent under your Home & Contents Insurance, some policies may not cover them if they’re being used for business purposes. If you do have electronic devices or any other equipment you use to operate your business, you may need Business Insurance to cover these if they’re stolen, or damaged by events such as a storm or fire.

2. You provide advice

If your business involves providing advice, running your business from home does not eliminate the likelihood of clients claiming your advice caused them loss (known as professional negligence). Therefore, Professional Indemnity is an important policy to hold to help cover your business against such events. Claims of professional negligence can be extremely expensive, as even if the claim has no basis, the cost of defending yourself can easily run into thousands of dollars.

3. You meet clients in person

Even if you don’t host clients at your home office, you may still need insurance if you have any physical interaction with clients or members of the public. If you meet clients in person, whether that’s at their home or in public places such as cafes, you could be held responsible for bodily injury or property damage in the course of your interactions – for example, you spill coffee or water on someone’s laptop. The policy that you may require for this type of incident is called Public Liability Insurance.

4. You sell products

If your business is involved in the production, supply or sale of products, there is a likelihood that a member of the public may allege your product caused them an injury or damaged their property. Such claims may not be very frequent, but if they do occur, you may find it very difficult to keep up with the legal costs of defending yourself. To help cover your business for claims of injury or property damage arising from products you sell, you may need Product Liability Insurance. This policy is usually sold as part of a Public Liability Insurance policy.

5. You use the internet to operate your business

Increasing cyber crime is no longer new news, with most of us at some point having experienced phone calls such as the ‘tax office’ claiming unpaid taxes, or the text message telling us we’ve won a phenomenal amount of money. To safeguard your online business’s cyber safety, it is not only important to have in place appropriate IT security measures, but Cyber Insurance is also a crucial consideration for any business operating solely online. Any form of digital presence makes your business susceptible to cyber crime, and when you operate solely online, a cyber attack might mean you don’t have much of a business left at all.

6. You employ staff

If you’ve hired employees to work for your business, this may also have implications for the insurance you need. You’re still responsible for the health and safety of your employees while they are working for you, even if they’re not at your business premises physically. Having any employee on a payroll means you are legally required to hold Worker’s Compensation Insurance to cover them in case they’re injured due to work they perform for you. Worker’s Compensation may also include cover for mental health claims that occur due to work being performed for your business.
If you’ve engaged contractors to work for you, you also need to check your Professional Indemnity and Public Liability policies to determine whether the coverage extends to them, or if they need to take out their own insurance.

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This information is intended to provide general insurance related information only. It is not intended to be comprehensive, nor does it, or should it (under any circumstances) be construed as constituting legal advice. You should seek independent legal or other professional advice before acting or relying on any of the contents of this information. Aon will not be responsible for any loss, damage, cost or expense you or anyone else incurs in reliance on or use of any information contained in this article.