Does insurance cover mail order/online marketing?
This is a question we get asked fairly frequently, and a recent email prompted me to try and answer this, along with a few snippets of information about our policy that may prove helpful.
Firstly, with regards to online sales, it’s primarily the products liability aspect that will apply. I’ve written a previous post about what both public and products liability cover, but if you need a recap, you can click here to read that blog post.
Does insurance cover online sales
If somebody purchases one of your products online, and there is an incident that could give rise to a claim, ie, they are injured during the normal use of that product, that is what products liability covers. A popular example for soap makers in our office is, is somebody uses one of your soaps, and it brings them out in spots and blisters.
Although our policy doesn’t have any limitations with regards to the percentage of your sales via your website, or other online shops, we are aware that other insurance providers most certainly do set limits, so it’s definitely worth double checking with yours (if it’s not us) to see if they have imposed limits on your policy, or excluded cover for online sales altogether.
Online sales of tutorials
We appreciate that for many crafters, online sales may not be restricted to actual tangible goods. Many crafts man and women now sell online tutorials for download. Whilst the actually sale itself is not excluded under our policy, cover for any claim or loss due to designs, plans, specifications, formulae, directions or advice prepared or given by you, is excluded under our policy. This is not covered under the product liability that we offer.
Online sales worldwide – USA/Canada
As we’ve already said, we don’t set any limits under our policy, for the percentage of your sales which are made online, HOWEVER, we do set a limit on how much you can send to USA and Canada. Under the policy that we offer, that limit is 20% of your total sales turnover. Unfortunately, if you sell more than that, ours is not the policy for your. Don’t take for grant that your insurance company will automatically cover sales to USA/Canada. Many will not!! In the USA/Canada they have a very different approach to liability, and a lot of insurers just don’t want to get involved. Although we do include cover, we set some very strict terms of cover.
Firstly, for USA/Canada the indemnity limit of public/products liability cover is capped at £500,000. Secondly, as the insurance policy that we offer is governed by UK law, the policy will not cover claims brought outside the United Kingdom and Ireland. The policy covers goods sold, supplied or distributed anywhere in the world, but claims must be brought against you in the United Kingdom or Ireland.
To round up, all insurance policies are different, and you MUST check with your own insurance provider to ensure that the cover you have, or are going to take out, covers exactly what you expect it to. Don’t assume that all policies are the same, they definitely are not.