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Insurance for online stores
Selling online moves your risks rather than removing them. The products you sell can still hurt someone, the stock in your garage or warehouse can still burn, and your store and customer data are now a target. Here are the covers an online business holds, the rules that apply, and how to compare quotes.
- Product liability for what you sell and import
- Cyber cover for your store and data
- No phone number needed to request quotes
What insurance does an online business need?
Most online stores hold three covers. Public and products liability responds if a product you sell injures someone or damages their property. Cyber insurance responds to a hacked store, a data breach or a fake invoice that diverts a payment. A business pack covers your stock, packing equipment and computers wherever you keep them, and the income you’d lose if they were destroyed.
If you import, the product cover matters more. The Australian Consumer Law’s definition of a manufacturer includes an importer and a supplier whose brand appears on the goods, so an online seller can carry a manufacturer’s liability.
Rules that apply to online sellers
| Rule | What it means |
|---|---|
| Australian Consumer Law | A manufacturer includes an importer and a supplier whose brand appears on the goods, so liability for a faulty product can rest with you |
| Mandatory reporting | Anyone in the supply chain who becomes aware of a death, serious injury or illness associated with a product must report it to the ACCC within 2 days |
| Privacy Act | Businesses with turnover of $3 million or less are generally exempt, but not if they trade in personal information or provide a health service. The OAIC also lets a small business opt in |
| Ransomware payments | Businesses with turnover of $3 million or more must report a ransomware or cyber extortion payment within 72 hours |
What’s usually covered, and what isn’t
Every policy differs. Read the PDS before you buy.
Usually covered
- Injury or damage caused by a product you sold. Public and products liability.
- A hacked store or data breach. Cyber insurance.
- Stock destroyed by fire, storm or theft. Business pack.
- Stock on the road. Goods in transit, if you add it.
Usually not covered
- Recall costs. Product recall cover is usually separate.
- Products sold into the USA or Canada, which most online policies exclude or refer.
- Stock held by a third-party warehouse, unless the policy names that location.
- Chargebacks and payment disputes, in most cases.
How to compare online store insurance
Online store insurance questions
Do online stores need public liability insurance?
It isn’t compulsory, but it’s the cover that responds if a product you sell injures someone. Marketplaces, wholesalers and landlords often ask for it.
Am I liable for products I import?
You can be. The Australian Consumer Law’s definition of a manufacturer includes an importer, so an importer can carry a manufacturer’s liability for a faulty product.
Do I need cyber insurance for an online store?
It isn’t compulsory, but it’s the cover built for a hacked store, a data breach or a diverted payment, which are the risks an online business faces most.
Does the Privacy Act apply to my online store?
If your turnover is over $3 million, generally yes. Under that, the OAIC says you’re generally exempt unless you trade in personal information, provide a health service or opt in.
Can online businesses compare insurance online?
Yes. Online stores can compare public and products liability, cyber and a business pack online. Sales into the USA or Canada go to a broker.
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Sources
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