What is online business insurance?

Running an online business today opens the door to incredible opportunities as well as unique risks. With over 65% of Canadian businesses now operating online and e-commerce sales projected to surpass $130 billion by 2027, according to EMARKETER, digital entrepreneurship is thriving.

But as more entrepreneurs go digital, the risks increase, too. Online businesses face a wide range of threats, including cyber attacks, data breaches, intellectual property disputes, and product recalls. Without proper coverage, a single lawsuit or system outage could jeopardize everything you’ve built. That’s where online business insurance comes in. It helps protect your business and reputation from unexpected disruptions.

Whether you sell products through an e-commerce platform, offer consulting services, or run a SaaS company, BrokerLink makes it easy to protect your online business with tailored, affordable commercial insurance solutions.

Types of insurance online businesses need in Canada

Online businesses face a different set of risks than traditional brick-and-mortar shops. Here at BrokerLink, we understand that. That’s why one of our commercial insurance experts will work with you to understand exactly what your business needs.

Whether it’s protecting you from cyber threats, product issues, lawsuits, or other unexpected losses, we’ll help you find the right business insurance policy to keep your business covered. From cyber insurance to product liability and more, keep reading to see how the right comprehensive coverage can give your online business the protection it deserves. Canadian online business insurance types:

Commercial general liability insurance

Even online businesses can be held liable for third-party injuries or property damage. If you meet clients in person, ship physical products, or participate in events, commercial general liability insurance can protect you against claims of third-party bodily injuries or property damage.

For example, if you’re an online consultant with occasional in-person meetings, and a client trips while visiting your home office for one of those meetings and injures themselves, general liability insurance can help cover medical expenses and legal costs.

Professional liability insurance

Also known as errors and omissions (E&O) insurance, this is essential for service-based businesses. It protects against claims of:

• Professional mistakes

• Negligence

• Misrepresentation

• Failure to deliver professional services as promised

For example, you're a beauty influencer and a brand pays you to promote a skincare product. Later, a viewer says your video led them to believe it was fragrance-free, but it wasn’t. The brand sues you, claiming your misleading claim hurt their image. Professional liability insurance could help cover legal defence and settlement costs.

Product liability insurance

If you're selling products online, you could be responsible for any harm caused by your products, even if you didn’t manufacture them.

For example, you run an Etsy store, and a customer says your handmade lotion caused a rare skin reaction. This coverage can pay for legal expenses, medical costs, settlements, or potential damages.

Cyber liability insurance

Online businesses are prime targets for cyber threats. Cyber insurance helps cover the fallout from things like:

• Data breaches

• Ransomware attacks

• Hacked customer information

For example, if you run a Shopify store and your customer data is compromised, cyber insurance can help pay for breach notifications, credit monitoring, and tech recovery.

Media liability insurance

Also known as advertising injury coverage in some policies, this insurance covers things like:

• Defamation (i.e., libel, slander)

• Copyright/trademark infringement

• Misappropriation of likeness

• Errors in published or broadcast content

For example, an influencer is sued for using unlicensed music in a sponsored video. Media liability coverage helps with legal defence and settlement costs.

Commercial property insurance

If you run your online business from home or a rented office, this can cover damage or loss of physical assets from covered events such as fire or theft. Assets can include:

• Computers

• Inventory

• Equipment

• Office supplies

For example, you’re a content creator and you work out of a home office. Your home is broken into, and someone steals your home studio equipment. Your commercial property insurance or home business insurance can help replace it.

Business interruption insurance

If an unexpected event forces you to pause operations, like a fire or cyber attack, this coverage can help recover lost income and operating expenses.

For example, you're an online consultant and a fire starts in your home office, burning all of your equipment. Business interruption insurance can help cover the income you lose until you're able to get back up and running.

Which insurance coverage do you need based on your online business type?

Now that we've covered the different types of insurance that online businesses should have, let's break them down by industry to help you figure out which insurance types are essential for you:

Freelancers and consultants

For business owners who offer advice, design, or other professional services, professional liability insurance is essential. It protects you if a client claims your work caused financial loss, like missed deadlines or faulty deliverables.

E-commerce store owners

If you sell products online, whether you made them yourself or not, you'll want product liability insurance to protect against claims of harm or damage caused by your goods. Consider pairing it with cyber insurance to guard against data breaches and other online threats. If you also have a physical location where you store your inventory, you may also want commercial property insurance.

SaaS and startups

If you run a digital platform or app, you’ll need cyber liability insurance for data protection and professional liability insurance to handle claims of software failures or service downtime.

Influencers and content creators

Influencers working with brands should consider media liability and professional liability insurance. These protect you if you’re accused of misusing a trademark, posting misleading content, or breaching a brand agreement.

Coaches and instructors

Life coaches, fitness trainers, and educators should consider professional liability insurance for claims related to advice or outcomes, and commercial general liability if you see clients in person or host workshops. Cyber insurance is another good one to add to help protect your clients' data from data breaches or cyberattacks. If you're unsure what type of insurance you need for your online business, contact BrokerLink today.

Common risks for online businesses in Canada

Online businesses may not have storefronts, but they still face serious risks, and the right insurance can make all the difference when things go wrong. Here are some examples that online Canadian businesses face every day:

Data breaches

Data breaches are more common than you think. According to Statistics Canada, approximately 1 in 6 Canadian businesses were affected by cybersecurity incidents in 2023.

Imagine a hacker gaining access to your customer payment data. This could lead to financial loss and legal action. Cyber liability insurance helps cover costs like notifying affected customers, restoring systems, and even managing public relations against reputational damage.

Payment fraud and chargebacks

Fraudulent purchases or disputed transactions can lead to lost revenue and fees. This is especially problematic for e-commerce stores using platforms like Shopify or Etsy. Depending on your cyber insurance policy, it may help with financial fraud coverage.

Copyright infringement

Say you use a stock image on your website or Instagram that turns out to be unlicensed. The image owner demands payment for using it or, worse, takes legal action against you. Professional liability or media liability insurance can help cover legal defence and settlements.

How to get a free online business insurance quote

If you are interested in purchasing online business insurance, the first step is to request a free quote from a trusted insurance broker like BrokerLink. We're a reputable insurance brokerage that has been around since 1991. Since then, we have become the go-to brokerage for Canadians nationwide.

We offer free insurance quotes to all businesses, and we use a complex algorithm that ensures they are as accurate and reliable as can be. Reach out to us over the phone, email, visit us in person, or use our free online quote tool to request a free quote today.

Learn more about online business insurance with BrokerLink

Do you want to learn more about online business insurance or how this type of coverage will protect your online business? Get in touch with BrokerLink today. Our team of commercial insurance specialists is available to find you the best possible policy at a competitive rate.

You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

Online business insurance FAQs

Does my online business need insurance?

Online business insurance is not government mandated in Canada. In other words, you are not legally required to insure your online business. That said, many business owners choose to purchase insurance for the financial security it offers. With this type of insurance, you will be protected against all kinds of losses, from liability claims to physical property damage. Plus, purchasing an online business insurance policy will make your company look more reputable and professional to other businesses and customers.

What types of online insurance coverage can an insurance broker help me find?

Insurance brokers can help online businesses of all shapes and sizes find a wide range of commercial insurance coverage. For example, a broker can find you a policy that features the basics like commercial general liability coverage and commercial property coverage, as well as extra protection, such as cyber insurance, crime insurance, umbrella liability insurance, employment liability insurance, and more.

How can I find cheap online business insurance?

Qualifying for business insurance discounts, implementing a quality risk management strategy at your business, bundling insurance policies, installing a security system in your office space, picking high policy deductibles, and shopping around before settling on a policy can all help you save money on online business insurance.

Where can I buy online business insurance?

Online business insurance can be purchased online, in person, or over the phone. Nowadays, most insurance companies and brokerages offer online insurance services, which range from purchasing coverage to renewing coverage to filing an insurance claim. Contact your local insurer to learn more about their processes.

How can I renew my online business insurance policy?

In most cases, you can renew your online business insurance policy online. Although, if you prefer to contact your insurance provider over the phone or in person, you can also renew your policy that way. Keep in mind that many insurance policies now renew automatically on the date that your existing policy expires. Thus, you may not have to do anything if you want your policy to renew.

What types of insurance coverage do online businesses in Canada need?

Online businesses will benefit from the same types of insurance coverage as other businesses, like commercial general liability coverage, product liability coverage, crime insurance, commercial property insurance, etc. However, there are a couple of other types of coverage that may be especially important for businesses that operate primarily online, such as cyber liability insurance, which can protect your business against hacks, data breaches, and cyber attacks.

If you have any questions, contact one of our local branches.