Marketplace Website Business Insurance
Getting insurance for your marketplace website business is essential.
Marketplace websites need to be protected against claims arising from things like violations of consumer privacy, product liability, and fraud.
For example, your marketplace allows fraudulent products to be sold on its platform, or a data breach causes consumers’ personal information to be leaked.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Marketplace Website Business
General liability insurance is — generally speaking — one of the most important insurance policies for marketplace websites.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
In addition to general liability, it is worth considering some of the following policies to bolster your coverage:
- Professional liability insurance: This policy is used to protect your site from the threat of users deciding that a mistake of yours has harmed them.
- Commercial property insurance: Should your business’s supplies, equipment, or other property be damaged by a covered event (e.g., natural disasters, fires, etc.), this policy will assist with the cost of replacing everything.
- Workers’ compensation insurance: If one of your workers falls ill or injures themselves in the performance of a work-related duty, this policy can support them with coverage for their lost wages and hospital bills.
During the search for insurance, you will encounter two principal types of insurance providers:
- Traditional brick-and-mortar insurers — Such as Nationwide and The Hartford.
- Online insurers — Such as Next and Tivly.
For the most part, online insurers are more popular with startups and small businesses because their policies cost significantly less than their traditional counterparts.
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Cost of General Liability Insurance
On average, marketplace website businesses in America spend between $350 - $900 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a marketplace website business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for a Marketplace Website Business
Example 1: While touring your place of business, a potential investor trips over an exposed cable, breaks a wrist in the resulting fall, and decides to sue your business. General liability insurance would cover your legal defense costs and any required settlement.
Example 2: A competitor sues your business for damages, claiming you stole his company’s logo. While you don’t think your logo looks like his, you realize the importance of protecting your business in court. General liability insurance would pay for your legal defense and any required settlement.
Example 3: As one of your employees takes a visitor on a tour of your business, the visitor slips on some wet flooring in the restroom. The fall breaks the visitor’s wrist and she demands your business pay for her medical treatment. General liability insurance would cover her medical expenses.
Other Types of Coverage Marketplace Website Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Professional Liability Insurance
While you strive to ensure your marketplace website satisfies each user, there’s always a chance someone might decide you made a mistake or your advice harmed them. If a site user sues your business for negligence, professional liability insurance would cover your legal fees and any required settlement.
Commercial Property Insurance
You made a major investment in the equipment, supplies, and real estate needed to establish your marketplace website business. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building and the business materials stored there.
Workers’ Compensation Insurance
If you have any employees, most states will require you to carry workers’ compensation insurance for your part-time and full-time workers. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a workplace accident.
Commercial Umbrella Insurance
While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your marketplace website business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Marketplace Website Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Due to the excessive liability that a marketplace website business is typically exposed to, it is absolutely necessary to obtain business insurance in advance.
This is especially true in cases where your website is mandated by law to carry a specific policy, such as workers’ compensation insurance.
Not necessarily. Certain exceptions may be written directly into your marketplace website business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.