Why does insuring an online business have to be so hard?

By: Hayley Chalmers

Date: 20 July 2011

I thought building a business was tough, but trying to get insurance for an online business is ridiculously hard.

The business insurance industry appears to be hiding behind the sofa from the 20th Century (the 21st Century must be a scary nightmare). It doesn’t seem to know how to insure ecommerce businesses – it definitely doesn’t know how to assess the risk.

They’ve actually quoted me more to insure £10K of stock than I pay for buildings and contents insurance combined! Explain.

They don’t have an insurance policy product for e-comm home workers. I know it’s a new industry, but come on, it’s as new as mobile phones. It’s been around for 10+ years, so they should have had specific products for it at least five years ago.

Isn’t insurance based on understanding risk and on history of that risk? Seems not to be the case any more.

Small businesses are here to stay and a lot of them will be on the internet selling stuff. Business forums are filled with people asking where or what business insurance to get and where to get it cheaper.

Insurance is about assessing risk – likelihood of a claim, and based on the historic claims. I don’t see this happening here. Where are the underwriters who used to make decisions and make a note on the policy file – we can’t do that now?

Why can’t you make a modular policy? Basics would be included, of course, but then just add in what we need/don’t need. I don’t need £2.5k of office equipment cover: I’ve only got a laptop and a printer, worth £500 max. Do I need £1m of public liability when I don’t see the public and no one comes to my house?

Have you installed a new-fangled computer system and over automated everything in the process, without the ability to be flexible? Are you just a call centre with standard products?  If we don’t fit your ‘shop’ or ‘tradesman’ policy you just load the premium because you don’t understand the risk. You see, the thing about automating a business is that computer systems should replicate your existing business processes – they shouldn’t change them.

You’ve even got online premium calculators – which are infuriating. If we don’t fit into your list of businesses – and I haven’t found one of these that lists e-commerce – you can’t quote.

Why not just say: ‘e-commerce home businesses need not apply. You’re too modern, please go away. You make us feel uncomfortable’?

And yet – oh the irony is overwhelming. You allow us to buy all sorts of insurance online and pay online – so what has that made YOU? Yes, an e-commerce business.

The brokers can see how ridiculous the situation is, but insurance companies can’t. Get a grip business insurance industry – it’s 2011, working from home on the internet has been a big thing for 10-plus years. Catch up!!

Hayley Chalmers, Short Couture

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