So, you sell widgets online – your customers browse your virtual aisles filling their virtual shopping carts with your widgets. Your customers are happy shopping from the comfort of their own home, internet café, during work or from where ever they might be. If something goes wrong in this virtual world you’ll be virtually ok right? Wrong.

Just because you don’t have direct contact with you customers doesn’t mean that they can’t make a claim directly against you. Even if you don’t manufacture the widgets yourself, often the mere act of distributing these widgets could be enough for your customer to make a claim against you.

Let’s take a closer look at a typical small business insurance policy wording – for example the NRMA Insurance PDS. Here we find the following definitions:

Product liability: liability for personal injury or property damage arising from your poduct…
Personal injury: bodily injury, sickness, disease, disability…
Property damage: physical loss, destruction or damage to tangible property…
Your product: anything (including any packaging, containers, directions, warnings, specifications…) manufactured, grown, extracted, produced, assembled, assembled, serviced, sold, supplied, distributed by you or for you…

So NRMA Insurance seems to think that you could potentially be liable. But is this enough to put your mind at rest? Well, only you can tell as after all it is your business and you should be comfortable enough reading the fine print of your insurance policy unless you seek professional help. Check our quick guide to insurance for business as a starting point.

What we can tell you is that quite often, retailers (whether online or not) can get dragged into court cases where the lawyers not only go after the product manufacturer, but everyone in the food chain – from the logistics company to marketing company and ultimately to yourself. Should you have warned your customers that certain versions of your widgets could potentially be harmful if used inappropriately? Should you have verified the age of the purchaser before selling them your widgets? These are all questions that could arise depending on the nature of your business. Of course, selling certain types of widgets to potentially underage consumers might actually be a direct liability to your business.

But even if a court finds that you aren’t liable, you’d still be stuck with legal bills wouldn’t you? So it pays to find out from your insurance company whether your liability policy will provide this cover.

What sort of widgets do you sell anyway? We’d love to hear all about them!

Almost every business will have property of some kind or another worth insuring. It could be as simple as the TV in your reception area, that ergonomic chair doing your back a favour, your laptop or indeed the vehicle that you use to go and see your clients. Look around you, what do you see? Of everything that you can see, what are the things that would add an avoidable financial cost to your bottom line? You don’t really want to replace your shiny new laptop do you?

Is it really worth buying that spare machine at auction, spending a couple of hundred bucks to refurbish in order to keep it as a spare in case the one in the shop breaks down? There’s insurance for that and it can even cover all of your machinery – usually at only a small fraction of what it would cost to replace.

However, as we mentioned earlier you might also need to insure your liability: to your employees if they suffer an accident for example, to the public if they slip or fall on your premises or to your customers when providing them with advice for example. Again, you should consult with a professional if you’re unsure. You can also use our estimator as a starting point to jog your memory and record what property you have but this won’t take your financial objectives into account.

Chances are, there’s probably an insurance product available for your every risk (except maybe polar expeditions!) – see our section on types of insurance for some examples.

Next: When to insure

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