QUESTION: I’m planning to start selling books online, and am wondering if I need insurance. If so, what kind?
ANSWER: In a nutshell, I really question the need for insurance when starting out. Unless you have a considerable stock of collectibles, have employees, or are selling other people’s items on consignment, the risks of online bookselling are extremely low.
Insurance for booksellers is a very specialized product, especially when you consider that it’s for an *online* bookseller. Of course, with general bookseller’s insurance, most of what you’re paying for is liability risks of operating a walk-in store — in case your store window gets broken, someone slips on a banana peel outside your store, etc. There’s workman’s compensation coverage for employees — but how many of us online booksellers have employees?
Even an insurance policy for a typical Internet-based merchant is of questionable value for us booksellers, because there isn’t the same type of risk. For example, if you’re selling other types of merchandise — electrical appliances, toys, tools — the chances of someone being injured with something they’ve bought from you is much greater.
With books, I think the main risks are fire, water damage, or theft. For that, sometimes you can get additional coverage (known as a “rider” or “endorsement”) to your regular homeowner’s or renter’s insurance. The other type of risk — that a pricey collectible isn’t received after shipment — can be covered with USPS insurance. After many years of bookselling, though, I’ve gotten into the habit of not insuring shipments unless they’re worth more than $200. When I started, I insured everything worth more than $50, but the losses were so few and far between, it made more economic sense to “self-insure” — in other words, accept the occasional loss.
However, when I first started bookselling and had my inventory in a Public Storage unit, I carried insurance because I was concerned about theft. One such policy that can be appropriate for this is “Fine Arts Insurance” through Michals Insurance Agency: http://www.michalsinsurance.com/finearts.html But most of what you’re paying for is the risk of transporting collectibles. For booksellers who are selling general stock, I wonder if it’s really worth it.
But if you are concerned about having insurance, I certainly would not discourage you from looking into it — in that case, the peace of mind alone would be worth it. A regular booksellers’ policy can be obtained through the American Booksellers Association, which operates LIBRIS Business Insurance for Independent Booksellers. They will also write coverage for Internet operations, but remember, most of the risk there involves Internet retailing in general — the risk of violating someone’s privacy, slander, fraud. When you’re not actually publishing a Web site yourself, but merely operating on a platform like Amazon — which is prescreening your customers for credit-card fraud, etc. — the risks are very low. But you can obtain a quote from from the ABA’s LIBRIS by calling (888) 694-8585, e-mailing LIBRIS@beechercarlson.com, or visiting www.libris.org.
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Q&A: Do I need an insurance policy for selling books online?
QUESTION: I’m planning to start selling books online, and am wondering if I need insurance. If so, what kind?
ANSWER: In a nutshell, I really question the need for insurance when starting out. Unless you have a considerable stock of collectibles, have employees, or are selling other people’s items on consignment, the risks of online bookselling are extremely low.
Insurance for booksellers is a very specialized product, especially when you consider that it’s for an *online* bookseller. Of course, with general bookseller’s insurance, most of what you’re paying for is liability risks of operating a walk-in store — in case your store window gets broken, someone slips on a banana peel outside your store, etc. There’s workman’s compensation coverage for employees — but how many of us online booksellers have employees?
Even an insurance policy for a typical Internet-based merchant is of questionable value for us booksellers, because there isn’t the same type of risk. For example, if you’re selling other types of merchandise — electrical appliances, toys, tools — the chances of someone being injured with something they’ve bought from you is much greater.
With books, I think the main risks are fire, water damage, or theft. For that, sometimes you can get additional coverage (known as a “rider” or “endorsement”) to your regular homeowner’s or renter’s insurance. The other type of risk — that a pricey collectible isn’t received after shipment — can be covered with USPS insurance. After many years of bookselling, though, I’ve gotten into the habit of not insuring shipments unless they’re worth more than $200. When I started, I insured everything worth more than $50, but the losses were so few and far between, it made more economic sense to “self-insure” — in other words, accept the occasional loss.
However, when I first started bookselling and had my inventory in a Public Storage unit, I carried insurance because I was concerned about theft. One such policy that can be appropriate for this is “Fine Arts Insurance” through Michals Insurance Agency: http://www.michalsinsurance.com/finearts.html But most of what you’re paying for is the risk of transporting collectibles. For booksellers who are selling general stock, I wonder if it’s really worth it.
But if you are concerned about having insurance, I certainly would not discourage you from looking into it — in that case, the peace of mind alone would be worth it. A regular booksellers’ policy can be obtained through the American Booksellers Association, which operates LIBRIS Business Insurance for Independent Booksellers. They will also write coverage for Internet operations, but remember, most of the risk there involves Internet retailing in general — the risk of violating someone’s privacy, slander, fraud. When you’re not actually publishing a Web site yourself, but merely operating on a platform like Amazon — which is prescreening your customers for credit-card fraud, etc. — the risks are very low. But you can obtain a quote from from the ABA’s LIBRIS by calling (888) 694-8585, e-mailing LIBRIS@beechercarlson.com, or visiting www.libris.org.
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