A business owner's policy (BOP) is a packaged small business insurance policy that covers most of the risks small businesses face. If you have an online business, you should customize your BOP to cover the specific risks you face. Here are some of the forms of coverage you may want to include in your BOP.
Electronic Data Loss Coverage
Most forms of online businesses rely on electronic data for their core operations. Maybe you have your customer's financial details in an electronic file, or maybe you save digital media in the cloud or on physical memory modules. In any of these cases, a loss of electronic data can set you back financially, but electronic data loss coverage will compensate you for the loss. For example, a photographer who loses their cache of digital photographs can file a claim of electronic data loss coverage for compensation.
Business Interruption Coverage
Business interruption coverage compensates you if something happens to your business properties and you are unable to continue with your normal operations. The coverage can help, for example, if hackers lock you out of your business website, your computer gets stolen, or a power surge damages your equipment. The policy will specify the specific losses that trigger business interruption coverage.
Every business needs some form of liability coverage. Liability coverage protects you from lawsuits that may arise if your business operations harm other people. For example, your clients may sue you if you accidentally expose their confidential data to other third parties.
If you deal in physical items, then you need content coverage to protect your merchandise in your store or warehouse. Maybe you sell clothes, toys, or electronics online. You can lose considerable money if a fire razes your store, but content coverage can compensate you for the loss.
Whereas contents coverage protects the merchandise on your premises, transportation coverage comes to your rescue if something happens to the merchandise during transportation. Say your delivery truck is involved in an accident, burglars attack your delivery truck, or poor packing leads to breakage of fragile merchandise. Transportation coverage will cushion you for the losses in such cases.
Intellectual Property Coverage
You may also need coverage for your intellectual property depending on your type of business. Intellectual property is intangible property such as ideas, product names, and product designs. For example, the coverage can protect you if someone sues you for infringing on their property rights by posting a picture without their consent.