An online shop has no customers on the premises and every other exposure a shop has. The stock is real and is usually somewhere with a sprinkler system and somebody else's name on the door. The products go to people you never meet, in territories you may not have thought about. And the shop itself is a website holding payment and identity data. Those are the three covers worth arguing about.
Product liability, and the territory question
Supplying goods brings liability under Part I of the Consumer Protection Act 1987, which reaches a supplier who cannot identify who supplied the goods and treats an importer into the United Kingdom as a producer. Product liability answers for injury and damage the goods cause. The territorial limits matter more for an online shop than for a high street one: sales to North America are frequently excluded or separately rated, and an online storefront sells there by default unless you stop it.
Stock, wherever it actually is
Stock in your own unit, stock in a third party fulfilment centre, stock in transit and stock at a market or pop up are four different places and not all policies reach all of them. Fulfilment agreements usually make you responsible for your goods in the provider's building, which means your policy needs to cover stock at a location you do not control. Seasonal peaks matter too: insuring an average when December holds four times the stock is the standard way to be underinsured at the worst moment.
The storefront, and the money going through it
Cyber cover answers for what happens when the site, the platform account or the email is compromised: restoration, business interruption while orders cannot be taken, notification of customers, and the regulator's questions. For a shop whose entire revenue arrives through one storefront, the interruption element is usually the largest part, and it is worth checking whether the cover reaches an outage at the platform rather than only at your own systems.
Consumer law sits beside the policy
Distance selling brings information, cancellation and returns obligations, and getting them wrong produces disputes and refunds rather than insurance claims. Legal expenses cover funds the disputes. It is worth separating the two in your own mind: insurance answers for harm and loss, and consumer law compliance is what stops most of the arguments starting.
Questions people ask about ecommerce insurance
What insurance does an ecommerce business need?
Product liability for the goods supplied, stock cover wherever the stock sits including a fulfilment provider, cyber for the storefront and the data, business interruption, and employers' liability once anybody is employed.
Does the policy cover stock in a fulfilment centre?
Only where the policy reaches that location. Fulfilment agreements usually make you responsible for your goods in the provider's building, so the cover needs to be written for stock at premises you do not control.
Are overseas sales covered?
Only within the territorial limits on the schedule. Sales to North America are commonly excluded or separately rated, and an online shop sells there by default unless the storefront is configured otherwise.
Is cyber insurance necessary for a small online shop?
If all revenue arrives through one storefront, the interruption from an outage or a compromise is usually the largest single exposure the business has, and cyber cover is what answers for the response and the lost trading.