Being a savvy eCommerce business owner, you understand the need for liability insurance for your Amazon Seller Store and have come to the right place for a quote (nice work!). You’ve likely noticed that as part of the process we ask to connect to your Amazon seller store, and you might be wondering why.
This article is here to explain why connecting your store gets you the best insurance for your Amazon store, and at the cheapest price. In this article, we’re going to show you how connecting your store benefits you. In short, access to your store’s information allows us to give you a cheaper, more tailor-made quote that’s right for you. Read on to find out how.
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Insurance for Your eCommerce Business
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What happens when you connect your eCommerce online store to Spott?
First of all, let us reassure you that the connection is completely secure, you don’t have to worry about it. But nevertheless, you might be thinking that we’re being a little forward. After all, we’re only just getting to know each other. Maybe we should chat a little, perhaps share a bottle of wine, find out what each other’s favorite movies are before asking for the keys to your business?
Here’s the deal: connecting to your store allows us to carry out the insurance underwriting process in the most accurate way possible, allowing us to give you the cheapest possible quote for Amazon seller insurance we can get you. When you connect your store, you are giving yourself the best chances possible to get the cheapest insurance quote out there for your business. That’s because Spott’s unique underwriting process looks at a myriad of elements from your store in order to determine the lowest price and best suited insurance policy for you. When you connect your store, those elements come to light and Spott can get to work getting you the cheapest and most suited insurance policy for your Amazon seller store.
Wait, what’s underwriting?
We’re glad you asked. Underwriting is a fancy industry word for assessing the insurance risk of a business so that insurance carriers know what price to set your premium at.
We know, we know – how hard can that be, right? Actually, it’s trickier than it sounds. A lot of factors go into the underwriting process, all of which affect the price of those premiums. To break it down a little, let’s look at the two main ones, risk and exposure.
Risk. Risk in this context refers to how risky the product is to the consumer. If you sell books, the risk is pretty low. Your customer might get a paper cut, but they probably won’t sue you over that. If you sell fireworks, on the other hand, you can see how that might be a more risky prospect. And of course, some things don’t look risky but can be; for example, cuddly toys for babies that present a choking hazard.
So that’s the first metric: how likely is it that someone using your product could be injured or cause an accident?
Exposure. The second major metric that goes into the insurance underwriting process is exposure. Essentially, the more of a product you sell, the higher your exposure will be, purely because that one-in-a-million chance, statistically speaking, is unlikely to come up if you sell one or even a hundred units of an item unless you’re super unlucky, but almost certainly will if you sell a million or more.
Whenever you get an insurance premium quote, someone, somewhere will have made some sort of calculation based on your risk factor and your exposure, or in other words, what you sell, and how much of it you sell. Hopefully, it goes without saying that the greater the risk and exposure, the more expensive the quote will be. But when that information isn’t available, the underwriter will hedge their bets and assume relatively high risk and/or exposure, just in case.
Why can’t my insurance broker carry out the insurance underwriting process properly?
Insurance companies are really good at figuring this stuff out and setting an appropriate premium with brick and mortar stores, because that’s what they’re used to. They’re really bad at doing it with eCommerce businesses like yours, because your ecommerce online store doesn’t look like what they’re expecting. They don’t know how to categorize risk (what you sell), and they’re not real sure how to evaluate your exposure (how much of it you sell) either.
It’s a bit like how an expert in modern art is able to value a new painting pretty accurately, but would be hopeless at valuing antique jewelry. Or a realtor specializing in Manhattan apartments would struggle when valuing a Montana farm. They have a pretty good idea of what’s involved in the valuation process, but don’t understand the market outside their area of expertise well enough to give an accurate valuation.
So you might be selling wedding dresses that, in your eyes, look exactly the ones in the boutique nearby – only, obviously, a lot nicer with more precise beading work – but in the eyes of the insurer your business is totally foreign. They’re used to seeing wedding dresses in shop windows, not in Windows 10.
Just to make things a little more complicated, traditional insurers calculate risk based on product categories. They know that hardware shops sell ladders, hammers and paint, and that the accessories shop next door sells hats, scarves and gloves. But ecommerce online stores often don’t work that way. You might choose to sell candles and artisan paints and framed pictures all in the same store, leaving them scratching their heads, wondering what category to place you in.
The result is that traditional insurers simply don’t have a good way to accurately determine your risk and exposure. That lack of lack of visibility is what causes them to give extremely high quotes to eCommerce businesses. If you get insurance through a traditional insurance carrier, you will most likely be overpaying for your eCommerce liability insurance.
Connecting your store is good for your business
The bottom line is, more accurate underwriting means you get the best deal for your business. That’s where Spott comes in. Unlike traditional insurers we do know eCommerce, so we straight away understand where you’re coming from. We’ve also developed a unique capability to accurately assess your risk and exposure, so that we can get you the cheapest possible insurance quotes for your business out there.
But in order to do that, we need to be able to get an accurate picture of your ecommerce store. That’s why we ask to connect your store during the onboarding process.
Just so you know, when you hit ‘connect store’ Amazon will ask you for permission to connect and edit. That’s just the way they’ve set things up and we can’t do much about that, but you should know that we don’t need to, and will never, edit the information on your Amazon Seller Store. All we’re doing is collecting the pieces of information we need to carry out the insurance underwriting process.
Believe it or not, Amazon seller insurance is good for your business too. No one expects an accident, that’s why they’re called accidents and not purposes. Although it’s a bit of a pain in the a$$, Amazon has done the right thing for you too in introducing the requirement to carry liability insurance if you sell more than $10,000 a month. But there’s no reason you should pay over the odds for that insurance. And with Spott on your side, you won’t.
It gets better, too. Connecting your store makes you eligible for Spott’s Pay As You Sell option, in which the premium you pay each month is directly linked to your risk and exposure as it changes, so if you sell less one month, you pay less on your insurance. Change out electric Christmas lights on your inventory for summer bunting? Your risk will go down, and so will your premiums. Or perhaps you only sell certain months of the year – if so, why pay the same off-season, when your exposure is low, as you do during your rush season? See what we mean?
Don’t worry, there’s no obligation
If you’re still not convinced, that’s cool. That bottle of wine and chat about our favorite movies isn’t on the table, we’re afraid, but the quote still is. You can simply skip that step when filling out the form. We’ll do our best to make an educated guess and get you a good deal anyway. Get insured with Spott today to make sure that your business is in the best hands and you no longer have to worry.