Electronic Commerce Insurance Keeps Online Businesses Secure

The Internet has spawned a proliferation of online business activities and is home to some of the largest retailers in the world, such as a popular book-selling site that since has expanded to include numerous other goods sold. It’s possible to purchase anything from a book to a car to a home and the insurance to protect all of them. But any business engaged in online activities needs to have electronic commerce insurance in place to ensure it as well as any customers or clients are protected against the perils unique to Internet-based commercial activities.

Electronic commerce is defined as the use of technology in business practices to enable internal and external workflows as well as communication with consumers, customers and clients. And such technology is used to electronically communicate as well as engage in commercial activities while at the same time reducing costs and increasing efficiencies.

Some industries have embraced the Internet and other forms of electronic activities, such as sending and receiving facsimiles. Chief among them are the travel industry, online retailers, insurance firms and auction sites, like eBay. If you want to own or rent a home or apartment, many times, an online application or other form of communication is the first step taken. But if that information somehow is used to commit fraud or engage in theft of monies, an online business could find itself facing a hefty lawsuit and possibly large legal judgment.

Among risks that are particularly high for online businesses is the possible theft of data, making data security a high priority. If personal or financial information is stolen by a computer hacker, for example, the online business has a heightened liability due to the increased need for it to provide security against such illegal accesses. And if a client should suffer a loss as a result of a breach of site security or some other means of illegal activity, the business owner might find a costly lawsuit threatening the future of the enterprise.

Interruption of commercial activities also is a strong threat facing online enterprises, such as might occur if a third-party vendor is in charge of handing certain types of online transactions and the site suddenly is unavailable for any number of reasons, like when a server goes down and the website cannot be accessed. Even a short time down can result in a great deal of lost sales or other commercial activities.

An electronic commerce policy can help alleviate potential losses and ensure a smoothly operating business remains, but there can be difficulties when filing a claim if something bad should happen. Because the nature of online businesses can vary greatly, the more information that can be provided to fully inform insurance agents and adjusters on the kinds of activity and commerce done can help speed up the claims process if one is filed.

And the level of coverage needed varies as well. The amount of insurance needed is relative to the amount of risk carried, as would be expected. Insurance experts advise carrying at least $1 million to $2 million in liability coverage to protect the business and its customers if the commercial activity is relatively small and only a small amount of equity is available.

What Is Electronic Commerce?

Electronic commerce or ecommerce is any kind of business transaction that is done over the internet that involves transferring information and goods. It covers a whole array of businesses from basic retail stores to highly specialized shops in music or for animals. It is one of the most important characteristics of the internet, and is highly useful in the world of business and marketing.

By utilizing ecommerce, you can transfer money or goods without time barriers and this is very convenient in this fast paced world that we live in. Ecommerce has expanded very rapidly over the last few years and doesn’t show any sign of letting up. It is expected for the differences between conventional and electronic barriers to become more blurred as ecommerce progresses as a form of transfer of funds and goods.
Business to business ecommerce is a bit different. It refers to electronic transfers between businesses as opposed to between a business and a consumer. There are many advantages to carrying out transfers electronically rather than traditional methods. Ecommerce has also led to more people doing business online and setting up electronic market places to do business.

If you are not aware of the basic principles of ecommerce setting up an online store can prove to be very challenging. You must thoroughly research the principles of ecommerce before opening up an online store. This is crucial to your overall ecommerce success. There are some things you will need to have before setting up an online market. First of all you will need shopping cart software. A shopping cart is software that allows your customers to purchase goods through your online store.

Also before starting your online business, it is wise to find a niche that is in demand. You will want to find a product that customers have trouble finding anywhere else such as in malls or department stores. You will also need to be sure that your website is ecommerce enabled. Another important factor is to consider shipping and the cost of shipping. All of these aspects play an important role in your success.

Lastly, you will need a way in which to receive payment online. For this you will need an online merchant account. If you take these steps in setting up your online ecommerce business you will have a greater chance at success for your company. If you do the proper research and learn the principles behind ecommerce you will have a flourishing online business in no time at all.

Historical Development of Electronic Commerce

The meaning of the term “electronic commerce” has changed over time. Originally, “electronic commerce” meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI, introduced in the late 1970s) to send commercial documents like purchase orders or invoices electronically.

Later it came to include activities more precisely termed “Web commerce” — the purchase of goods and services over the World Wide Web via secure servers (note HTTPS, a special server protocol which encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic pay services, like credit card payment authorizations.

When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed (during the browser wars of this period). Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary Web sites.

Although a large number of “pure e-commerce” companies disappeared during the dot-com collapse in 2000 and 2001, many “brick-and-mortar” retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.

As of 2005, e-commerce has become well-established in major cities across much of North America, Western Europe, and certain East Asian countries like South Korea. However, e-commerce is still emerging slowly in some industrialized countries, and is practically nonexistent in many Third World countries.

Electronic commerce has unlimited potential for both developed and developing nations, offering lucrative profits in a highly unregulated environment.