The costs of online retail

Online retailing is a growing trend which has substantially increased since the COVID-19 pandemic.  With easy access for consumers via online marketplaces such as Amazon and eBay, reduced overheads, and a wider market and customer base, sellers are continuing to move to online sales of their products.

There are however some disadvantages, these include aspects such as website costs, e-commerce laws, security and fraud, customer trust and of course insurance implications.

The fact a trader no longer has a shop front and has gone online doesn’t change their responsibilities in terms of what they sell and it doesn’t necessarily reduce their business’s liabilities; in some cases it may actually increase them.

Similar to traditional or face to face sales, the distributor could be held liable should the products they’ve supplied damage a customer’s property, injures them or makes them ill.  This could be especially so if the distributor manufactures or makes what they sell; clothing; jewellery and trinkets, and certain foods for example.

It’s likely the owner of the damaged property or the injured or ill person will claim against the distributor for damages.  This could also include a compensation amount depending on the extent of the damage, injury or illness.

While it is less common for customers to chase the retailer in the event of a claim, they can still be liable. This is particularly important if they are selling products that are manufactured abroad and therefore tracing the business responsible for them is impossible, whether because it’s not documented, or simply there is no contractual obligation to give any financial compensation.

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This article was originally published by Berkley Insurance Australia. To read the rest of this article click here

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