Insurance for Etsy sellers
Online marketplaces like Etsy offer entrepreneurs and crafters a huge platform to share their passion with customers worldwide. Selling on Etsy is paying off – in 2021, Etsy businesses increased their sales by an average of 23% compared to 2019.
If you’re venturing into the Etsy marketplace for the first time, or you’re a veteran at selling your products online, it’s vital to safeguard your business. While selling online can alleviate some of the risks you can face if you sell in a physical space, your business can still be vulnerable to inventory theft or damage. Additionally, you can be more susceptible to online threats, such as a cyber-attack or a data breach.
What is Etsy seller insurance?
As an Etsy store owner, you need an insurance policy that can protect you financially against allegations of faulty products and general liabilities.
Our Etsy insurance policy packages protect small business owners against the risks associated with producing and selling merchandise online, like cyber risks and liable events of third-party property damage or bodily injury.
What does it cover?
A comprehensive Etsy seller insurance package will typically include the following coverages:
- Commercial General Liability (CGL) Insurance: While it’s likely you conduct most of your business online (especially if you sell your products exclusively on Etsy), you can still find yourself liable for claims of third-party injury and property damage. Thankfully, claims like these can be covered by CGL. For example, a prospective customer is visiting your home to pick up their order in person and they trip over your front doorstep. As they’re at your home for business purposes, your CGL insurance can cover the legal expenses and relevant medical fees, regardless of the lawsuit’s outcome.
- Product Liability Insurance: As a part of CGL insurance, product liability protects you against claims alleging third-party property damage or bodily injury that was caused by a product you manufacture, distribute, or sell, generally due to a defect of some manner. For instance, say a customer claims the organic body lotion you made caused a severe allergic reaction. Your product liability insurance could cover the legal fees and their medical expenses.
- Cyber Liability Insurance: This is one of the most important coverages for retailers selling products online – especially if you store customer data. Cyber insurance covers costs associated with technological incidents, such as a cyber hack involving your computer systems and data. For example, you open a malicious link on a spam email which allows a scammer to access your customers’ financial data. Cyber liability insurance could cover the cost to notify customers and secure your data system, as well as any legal expenses from the data breach.
- Contents Insurance: If you store stock and own business-related equipment, it’s important to have contents insurance. It can protect stock, equipment, furniture and machinery from insured risks that occur beyond your control, such as a fire or theft. For example, suppose you store a lot of stock in your home office, and you experience a fire that destroys the majority of your inventory. Contents insurance can cover the replacement value of that inventory.
Additional coverage to consider:
How much does it cost?
For a low-risk, small business selling products on Etsy, you can anticipate a starting cost of approximately $500 annually for a basic CGL policy.
However, similarly to brick-and-mortar businesses, many factors can influence the cost of an insurance policy for your Etsy store. For instance, if you sell expensive products, such as luxury jewelry or technology, you may experience a higher premium than someone who sells low-value products.
In the quoting process, we’ll ask some simple questions that’ll help us determine what coverage you should have. Below are some of the main factors insurance companies take into consideration when pricing your policy:
- Sales volume
- Type of products sold
- Value of inventory
- Number of employees
- Claims history
To get you the best price for your business, we’ve partnered with more than 50 insurance providers so we can offer you the best coverage to suit your specific needs.
Are Etsy sellers required to have insurance?
While Etsy doesn’t require insurance to become an Etsy seller, it’s essential for any business that sells, develops, or manufactures products and sells them online.
Common claims scenarios
Frequently asked questions