The ever-lasting debate around “brick-and-mortar VERSUS digital” is becoming a conversation about “brick-and-mortar PLUS digital”. Businesses should not be choosing one or the other, they need to embrace a multi-channel approach to serving their customers. Digital allows retailers to deliver a more attractive shopping experience, offering convenience, options and personalization.

The multi-channel approach brings with it many opportunities, but also a risk. A critical, but often overlooked, risk relates to commercial insurance. Business owners may not realize that their traditional insurance policy may not cover some critical risks that are specific to operating in the digital world.

Many business owners assume that their online service providers (e.g., Shopify, PayPal) hold the responsibility for insurance. That is not the case. Listed below are a few examples of activities that would require you to re-think your traditional insurance policy.

  1. Selling goods outside of Canada. In a brick-and-mortar environment, you are likely only serving local customers. In an online world, your customers could be anywhere in the world. Many insurance policies restrict your insurance coverage to Canadian sales, leaving you exposed to a growing percent of your sales.
  2. Holding customer information digitally. As you offer more products are serves online, you will naturally have more information about your customers stored digitally. This information could be names, contact information and products purchased. If you have this information stored on your computer and it somehow gets leaked (e.g., accidentally emailing it out, your computer getting hacked), you could be held responsible.
  3. Growing your business beyond your current insurance limits. Part of the reason you may offer services online is to drive growth. Most policies assume a certain dollar revenue for your business, and you should be updating your policy as you grow. In addition, as you grow the business online, you should make sure your insurance (e.g., Business Interruption Insurance) covers both your online and your offline business.
  4. Holding less or different inventory. As your business mix shifts, you may hold less inventory in-store, or you may be holding inventory in a different place. As a result, you need to make sure that your insurance policy accounts for this. For example, if you hold less inventory in-store, you could adjust your policy and save a few dollars.
  5. Posting articles and comments online. As a business owner, you could be accused (rightly or wrongly) for copyright infringement, slander or libel based on what you write or say. As you digitize, you will naturally have more content posted online that could get you into trouble. You have to make sure your insurance policy protects you against such exposure.

These are just a few examples of risks that you may face as you grow your online presence. You should work with a licensed insurance brokerage/agency to make sure you protect yourself.

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About Zensurance

Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on digitizing businesses and technology startups. We understand what it is to work with new technology, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business. You

If you have specific questions about your business insurance, please visit us at or email us at and we will find the answers for you.