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Best E-Commerce Business Insurance

E-commerce general liability insurance starts as low as $21/month*

*Applies to quotes made through Insureon only. Average monthly premium calculations are estimates and may vary by state, insurance provider, and the nature of your business. Where required or allowed by state law, insurance taxes, service fees, and other surcharges may be included and billed separately from the premium.

Quotes available through: Insureon
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  • All online business owners should invest in e-commerce business insurance due to the unique set of risks posed with online consumer facing businesses.
  • Depending on the policy you choose, you can get coverage for things like lost or damaged merchandise, consumer injuries from your products, employee injuries, property damage, and more.
  • Marketplaces like Amazon often require sellers to have certain types of e-commerce insurance coverage to be able to operate on their site.
  • Online business insurance can be very affordable depending on what types of coverage you choose.
  • E-commerce insurance costs depend on a variety of factors, including your business location, your industry, the size of your business, and the insurance provider you choose.
  • To find the right policy for your online business, visit our online comparison tool to compare policies and get same-day coverage.

Running an online business can sometimes seem like a low-risk, high-reward endeavor, but?internet retailers are often subject to many of the same kinds of risk and liability as brick-and-mortar stores.

We’ve put together this guide to online retailer insurance to help small-business owners understand their options. Read on to get to the bottom of big questions like:

  • Who needs e-commerce business insurance?
  • What does e-commerce insurance typically cover?
  • What is the difference between general liability and other liability insurance?
  • How much it will really cost to safeguard your professional future?

Our recommendation for e-commerce coverage

Advertiser Disclosure
Company Name
Types of Insurance Offered
AM Best Financial Strength Score
View Plans
The Hartford
The Hartford
BOP - General Liability - Professional Liability - Workers' Comp - Sole Proprietors - Commercial Auto - Fidelity Bond
A+ (Superior)
BOP - General Liability - Professional Liability - Workers' Comp - Sole Proprietors
A++ (Superior)
Nationwide
Nationwide
BOP - General Liability - Workers' Comp - Sole Proprietors
A+ (Superior)
Liberty Mutual
Liberty Mutual
General Liability - Workers' Comp - Sole Proprietors - Commercial Auto
A (Excellent)
BOP - Professional Liability - Workers' Comp - Sole Proprietors
A++ (Superior)

Who needs e-commerce business insurance?

Anyone who sells online should consider having e-commerce business insurance. This includes foreign sellers that sell products to customers in the US.?

Common people that need e-commerce insurance include:

Some e-commerce platforms, such as Amazon, require certain sellers to have business insurance.

Amazon insurance requirements for sellers

Amazon requires small business insurance for Amazon sellers that have sales over $10,000 per month. However, it’s also important to insure yourself regardless of how much you make. Amazon insurance requirements state you must have a basic plan for liability coverage in place as well as a cyber liability insurance plan.?

General liability insurance ensures you will be covered in the event of lawsuits due to issues with customers. Without this coverage, you as a seller can be forced to pay out of pocket if the products you sell malfunction or damage a buyer’s property.?

Cyber liability Insurance is required by Amazon and is especially important for sellers that collect personally identifiable information (PII). PII can include simple data such as names, addresses, and payment information. If this data is leaked or stolen, a cyber liability plan can protect you from potential fallouts.

Etsy insurance for sellers

If you plan to sell on Etsy, insurance is a good way to limit your risk. However, Etsy doesn’t require its sellers to have business insurance in place. It’s still important to note that not having insurance will leave you exposed to potential financial burdens if something goes wrong with a customer. It’s not hard to find affordable insurance for Etsy sellers that ensure you are covered against potential lawsuits and damages.?

As with Amazon stores, we recommend general liability and cyber liability insurance for Etsy sellers. Since general liability is broad-reaching, it will ensure you are covered should any of your products cause harm to a buyer or their property. Cyber liability can protect you from hacks to your business account, as well as potential data leaks related to sensitive customer information.

Why do online shops and e-commerce businesses need insurance?

Apart from certain websites or platforms requiring member sellers to have business insurance, operating an online business comes with similar risks to operating a physical one. Therefore, just as a physical store protects itself through liability insurance, so should online businesses.

One of the benefits of online businesses is that you often have a greater visibility and reach of audience. However, this also presents a greater risk of lawsuits and potential damages. Therefore, e-commerce businesses should be prepared with adequate business insurance.

Some examples of risks e-commerce businesses face include:

The right types of business insurance can help protect you from all of the above scenarios.

Discover your ideal policy in minutes Unlock plans from over 30 top providers, now! Suitcase and Shield With Checkmark GET PRICES

What does e-commerce business insurance cover?

You can customize your e-commerce business insurance so that it meets the unique needs of your business.

The type of coverage you need for your online shop depends on what you’re selling, who you’re interacting with, and what types of situations you’ll likely encounter in the course of doing business.?

Small operations may be satisfied with a basic policy that covers the essentials. Business owners looking to scale or who already have more complex operations may be better served by investing in a comprehensive one that ensures they’re protected on every level. Larger businesses may also employ a larger workforce, in this case, you may also consider purchasing fidelity bond insurance. You can also opt for extra coverage with a commercial umbrella insurance policy.?

These are some common types of insurance coverages that e-commerce business should consider getting:

To help you determine which types of coverage you need for your online business, we explain these in more detail below.

You can also speak with an experienced professional who can help you better understand your risks and coverage needs.

General liability insurance for e-commerce?

General liability insurance?covers three main scenarios:

  1. If someone gets hurt while interacting with your business
  2. If someone incurs property damage while interacting with your business
  3. If someone accuses you of libel, slander, or copyright infringement

Say you hired a writer who was in charge of populating your blog with fantastic, high-converting content. Months after launching that blog, you get an email from a competitor saying they’re suing you for using content stolen from their site. You may be protected from suspected copyright infringement thanks to general liability coverage. For more comprehensive coverage, you can also consider a business owner’s policy.

Cyber liability insurance for e-commerce

Global cybercrime costs are expected to hit an?annual total of $10.5 trillion USD?by 2025, according to Cybersecurity Ventures. Cyber attacks can ruin a business’s reputation and even lead to a company’s collapse, but having?cyber liability insurance?can help.

These policies cover lawsuits, settlements, legal penalties, and fines related to data breaches brought on by hackers and other cyberattacks. You may also receive reimbursement for revenue lost due to an attack, as well as payments related to managing breaches.?

For example, if you run an online business that was held hostage by hackers asking for ransom, your terms might cover lost revenue and PR agency fees to assist in reputation management post-attack.

Product liability insurance for e-commerce

Product liability coverage usually comes included as part of your general liability insurance plan.

If a customer is injured or contracts an illness because of your products, you may be protected if you have product liability insurance. This covers products that are poorly made, broken or toxic and injuries sustained because you didn’t include the right instructions or usage warnings.

For instance, say that you’re selling a type of colorful craft clay intended for kids. You’ve tested the product, but somehow, the latest batch has caused allergic reactions in some of your customers. This policy type would theoretically cover your liability in relation to customers’ medical bills and/or any settlements you had to pay out during arbitration or in court.

Business personal property insurance for e-commerce?

Most of your business may exist in cyberspace, but your physical products must be stored somewhere in the real world. Business personal property insurance and commercial property insurance protect against loss of or damage to those products and any other property directly connected to your business.

One of the most obvious examples of this would be a flood that totaled your home. Your home insurance covers personal items, like your bedroom furniture and clothes, but you need business personal property insurance to pay for replacing all of your inventory, the computers you used for your business, and more.

Transit insurance for e-commerce?

Transit insurance could benefit you if your business often sends out large shipments of valuable goods. Transit insurance covers product damage or loss that occurs during transit due to theft or natural disasters, including wind, fire, or water.

Transit insurance can generally be broken down into two types:

Say you’re a wholesale art purveyor who regularly ships out tens of thousands of dollars in prints and paintings. Unfortunately, some of your paintings are stolen while in transit. Hopefully, your carrier has its own insurance, but doubling down with inland marine insurance ensures you’re fully covered and not suffering a pricey loss.

Professional liability insurance for e-commerce

Running a business can be a minefield, and you need help dodging liability related to true mistakes made on contracts and essential paperwork. Professional liability insurance is sometimes referred to as?errors and omissions (E&O) insurance because it covers you in case you forget to do something or fail to live up to a legal promise.

A great example of this in the e-commerce world would be missing a guaranteed delivery date that causes financial losses for your customer. You said you’d have 1,000 widgets to them by December 1st, but you failed and they lost sales as a result. They’re suing to recover missing revenue, but this is where your insurance hopefully kicks in.

Workers’ compensation insurance for?e-commerce?

Many states, such as California, require businesses of a certain size to carry workers’ compensation insurance. This ensures that employees are protected in case they’re injured or even killed on the job. Some of the most common workers comp scenarios are a slip and fall in your warehouse or an employee who is injured making a local delivery at your company’s request.

Discover your ideal policy in minutes Unlock plans from over 30 top providers, now! Suitcase and Shield With Checkmark GET PRICES

How much does e-commerce insurance cost?

According to Next Insurance, e-commerce liability insurance can cost as little as $25 a month for small businesses with a limited workforce and premises.?

That said, the?exact amount it will cost to protect your online store depends on a variety of factors, including:

How to get e-commerce business insurance

There are several ways to get coverage for your e-commerce business, but the most important thing is to get several quotes so you know you’re getting the best business insurance for your specific needs.

Visit our online tool to get insurance policies from top companies. Search by type of insurance or look at insurance recommendations based on specific circumstances, such as if you have a home-based business or sole proprietorship.?

Before signing on the dotted line, be certain about what type of insurance you need and ask about bundling services to take advantage of any available discounts.

Speak with an insurance agent to get a personalized comparison and free quote.

FAQ: E-commerce business insurance

What insurance do I need for selling stuff online?

To protect your online business, your minimum coverage should include general liability and product liability insurance. You can also add other policies or coverage types to protect against cyberattacks, employee lawsuits, and inventory loss.

Are online shops required to have e-commerce business insurance?

Experts highly recommend online shops carry e-commerce business insurance, but coverage is not necessarily mandated. You can operate without insurance, but you risk losing your business and your assets in the face of an adverse event. Note too that some online platforms, like Amazon, require sellers to carry separate insurance.

Do you need insurance to start a dropshipping business?

Dropshipping businesses are just another type of e-commerce business, so you still need to cover your bases by investing in insurance. In fact, because you’re not privy to the creation or initial shipping of your products, you may even benefit more from having extra protection.

What is the best insurance for an e-commerce business?

General liability and product liability policies are the two best policies for any e-commerce business owner to start with. Then, you can add coverage based on your unique needs and business operations.

View and buy other coverage types here.

Alana Luna (Musselman)
Alana Luna (Musselman) Writer & Content Strategist

Alana Luna (Musselman) is a versatile storyteller with over a decade of writing experience. She is passionate about helping people build their business through unique and engaging content. Some examples of her current freelance projects include building content strategies for small businesses, completing industry research to build case studies, crafting buyer guides and more.

She has a passion and keen ability to simplify complex ideas through storytelling to make it easier for readers to understand hard-to-digest information. As such, Alana’s writing holds strong three principles – content that educates, engages and entertains.

Apart from her contributions to LA Times Compare, Alana has freelanced and ghostwritten for large publications and prestigious brands such as Orbitz, Groupon, Amazon, JCPenney, Walmart and more.

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