As people look for shopping convenience and pricing deals, they are turning to the internet for everything from posh brands and children’s items to gadgets and gifts. If you have gotten the entrepreneurial bug and are making a business out of reselling, drop-shipping or consigning, you need financial protections for your personal and company assets.

Reselling has many earnings opportunities, but it also has risks that could land you in serious financial trouble. Here, we’ll look at insurance options that will help if you have a physical loss of your product or liability claim.

Physical loss of product, equipment or workspace

Whether you are storing inventory at your home or at an off-site facility, you need to be prepared for theft, fires, floods, wind damage and vandalism. Beyond practicing flood, fire and theft prevention, you need e-commerce insurance for resellers, drop-shippers and online consignment shops. E-commerce insurance helps if your products are lost or damaged. It will also pay to repair or replace your business equipment if it’s damaged in a covered event. Your computers, packing materials, postage machines and storage systems can be included in your coverage, as can inventory stored in an off-site facility. Note that flood insurance is usually sold as a separate policy.

Property insurance for online resellers is available as part of a business owners policy (BOP) or as a stand-alone policy. A BOP is a combined-coverage product for smaller businesses, typically those with revenue of less than $5 million per year. It protects against lost or damaged inventory, structures, furniture and cabinets, and business equipment. It also includes liability insurance and income protection.

Business income protection is a crucial coverage for resellers, drop-shippers and home-based consignment shops. It provides a flow of funds if your operations are shut down by a covered event and you lose revenue as a result. If you opt for a stand-alone e-commerce property policy, make sure business interruption coverage is included.

Although a BOP for online resellers doesn’t protect your business from the costs of injuries to your workers, it does help pay for damage your employees cause to others in the course of their work duties. For example, say a worker is scouting deals at a thrift shop and breaks something. In that case, the damage would be covered. A BOP would also cover you if a client was injured at your worksite. This coverage is called general liability insurance.

If your home is your worksite, your homeowners insurance might not be adequate to insure your reselling business. Things like burst pipes, fallen trees, and fire or wind damage could make your workspace unusable. While your homeowners insurance may cover the structural repairs, you’d likely need help with the cost of securing an alternative storage or workspace until the damaged part of your home is repaired. This is known as extra expense coverage. Ask your insurance agent about this coverage, since it might not be automatically included in a commercial property insurance policy for home businesses.

Liability insurance for home-based reseller businesses

While general liability insurance is included in a BOP and available as a stand-alone product, it does not cover all liabilities. For example, you may have product liability and cyber liability risks.

Even if you did not produce an item, you could be named in a product liability lawsuit if you are part of the distribution chain. General liability insurance doesn’t cover product-related injuries, which can be disabling or even deadly. For such claims, you’d need product liability insurance. This helps pay for your legal defense, medical payments, and settlements or judgments against your company. These claims can run into the millions of dollars, so going without product liability insurance is a huge risk.

Closely associated with product liability is product recall insurance. Whenever you are reselling products, you may be subject to a recall. Recalls are laden with costs, from removing the item from your website, to shipping it back to the manufacturer, to notifying your buyers of the problem. Product recall insurance can help cover these costs. Neglecting or skimping on a recall because of uninsured costs can lead to major liability exposures.

As an e-commerce business, you should also consider cyber liability insurance for resellers. This coverage is critical, even if you use a third-party platform for listing, ordering or payments. If your customers’ financial accounts or personal data are leaked, they could name you as a liable party. Cyber liability insurance helps pay for legal costs, forensic investigations, notifications and compensatory obligations to victims, among other services based on the insurer’s offerings. You should be aware that cybercriminals are extremely active in the small to midsize online business space. Check your contracts with your platform providers and payment processors to make sure you don’t have uncovered liabilities.

If you are selling consigned products, ask your insurance agent about consignment insurance. This is a kind of gap insurance that helps cover the value of products owned by others but on consignment to you for sale. The items need to be in your possession, and are typically covered to an agreed-upon value for which you are liable to the owner . Your consignor contracts need to be structured to reflect the reimbursement cost and loss events covered by your insurance, so you don’t find yourself on the hook for large, uncovered payouts.

Liability for employee injuries and discrimination

Two kinds of crucial insurance are workers’ compensation and employment practices liability. Even home-based businesses need these coverages if they hire help.

The employer liability portion of a workers’ comp policy for online resellers protects you if an injured employee seeks more than what workers’ compensation insurance will pay. It covers your legal expenses, settlements and court judgments. It’s typically called Part B of a workers’ compensation insurance policy.

Employment practices liability insurance protects your business if an employee alleges discrimination or harassment. Home-based businesses can be especially vulnerable to complaints of harassment because the workspace is typically highly private and unmonitored.

Commercial auto insurance for your business

If you make deliveries to shipping facilities or cart your products between storage sites and home, you are operating a vehicle for business purposes. Your personal auto insurance might not cover such activities, so ask your insurance agent if you need commercial auto insurance.  The liability portion is especially important if you are accused of liability for an injury or property damage. If you have employees running errands, they need to be covered as well.

Don’t leave your financial protection to chance. Insurance for resellers, drop-shippers and online consignment shops can keep your e-commerce business funded and operating. Your online partners may even require it!