November 18

5 Common eCommerce Risks Businesses Face

As with all businesses, running an eCommerce business is not without risk. First of all is specific eCommerce risk. Selling products online, even through Amazon FBA,  involves just as many potential dangers as selling them at a brick and mortar store. There are several unique risks of eCommerce relating to privacy, online security, and ownership and liability concerns. Others are common to any online business. As a result, it’s vital to insure your eCommerce business against risks. Moreover,  it’s also a requirement for selling on Amazon FBA. Here are common examples of risks eCommerce businesses face.

eCommerce Risk 1: Cyber Attacks

Cybercriminals often target eCommerce businesses. There has also been an increase in cyber attacks in recent years and one of the reasons is the effect of coronavirus on eCommerce. No business is too small to be attacked. That’s why many small business owners make the mistake of not considering their business at risk of a data breach. A data breach could cause your business extended downtime resulting in losses, or worse yet customer privacy being jeopardised. Above all, this could end up in a lawsuit against your company. Therefore, it’s important to ensure you protect your business against data breaches.

Risk 2: Privacy Issues

It’s common knowledge in the business that data privacy and security are big risks for eCommerce. Privacy laws state that eCommerce businesses need to be completely clear about what information they’re taking from visitors to their site. Yes, it’s standard to collect this data for analytical purposes. However,  you need to ensure you follow the correct guidelines according to the law. Otherwise, you certainly could be liable for infringement or interference with privacy rights.

eCommerce Risk 3: Intellectual property risks

Your intellectual property is at risk if you don’t get it protected. There are several risk areas. Firstly, this must include all aspects of your business. Furthermore, it must include products and branding, because other businesses could otherwise claim the rights to these. Here is the official government guide to protecting intellectual property for eCommerce. Secondly, you could also be at risk of intellectual property infringement as an eCommerce business. In addition, even if your business is legitimate, you need to be careful with third-party advertising. That’s because it could infringe on another company’s intellectual property.

 Risk 4: Product liability

As with any businesses that sell products to customers eCommerce businesses need product liability insurance. It’s important to make sure you go with the right product liability insurance for your business. If an item you’ve sold has defects or causes harm to a customer you need to be protected. Because you’re otherwise at risk of liability, make sure all the products you’re selling also come with any necessary warnings and directions. Test your products as well to check for any possible flaws.

eCommerce Risk 5:Professional liability

You need to ensure that you treat your customers fairly according to the conditions both of you agreed to. If you fail to deliver an item, for instance, be sure you compensate the customer fairly.  This can be quite a complicated issue and you don’t want customer complaints. You can find out more about your professional liability from The Insurance Octopus. You’ll need to take out sufficient business insurance to trade as an eCommerce business. So make sure you are as informed as possible. This will be the best way to protect your company.


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