The insurer has rolled out a novel premium calculating for online businesses to pay based on what they sell.
Ecommerce insurance company Spott has announced the launch of a new Pay-As-You-Sell liability insurance model.
The coverage lets digital businesses pay premiums based specifically on how much they sell.
The design of this ecommerce insurance is such that an online company will pay liability coverage premiums based on how much they sell and will never have to pay higher than their original premium amount. As a result of this pricing model launch, Spott expects to be able to leverage its profound digital business understanding and the importance of aligning their expenses with the revenue they generate. The goal is to use this strategy to ease digital companies’ financial burdens while simultaneously boosting their resilience.
As the digital commerce industry matures and evolves, advancements in tech, products, and services are making it easier for businesses to sell – and for consumers to shop – online. Recent reports have suggested that the industry is expecting a 56 percent growth rate over the next four years. This will bring it to about $8.1 trillion by the close of 2026.
With the growth of digital commerce comes the importance of ecommerce insurance liability coverage.
According to a recent news release from Spott, the liability risks faced by a company are closely linked with the number of units they sell. That said, conventional insurers use a different approach to calculating premiums. For instance, they usually look to payment approach or on projected annual revenues.
Spott’s model recognizes the dynamic nature of online sales, which are known for being challenging to predict. As a result, the company created its Pay-As-You-Sell model to make it possible for companies selling online to pay for their coverage based on the actual sales they are making on an ongoing basis. In this way, those companies are not required to pay out substantial sums upfront and can instead focus their attention on their operations without the worry that a loss could prove devastating.
Spott’s Pay-As-You-Sell ecommerce insurance uses data-powered tech which collects and conducts a real-time analysis of business data, drawing insights from observable high granularity data, said the news release. Once a company has fully registered through Spott’s digital process, coverage becomes immediately active and premiums are based on the actual amount the merchant sells.