E-COMMERCE BUSINESS INSURANCE: Best Coverage and All You Should Know

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Running an online business can help to reduce some of the risks that physical establishments experience, such as slip-and-fall incidents and storefront damage. However, e-commerce companies still require insurance. To guard against risks like customer harm and inventory damage, the majority of online retailers should have both general liability insurance and product liability insurance. You might need to show proof of business insurance to some third-party marketplaces, like Amazon, to be able to sell on their website. Here are some essential details concerning e-commerce business insurance in the USA, along with our recommendations for the best options.

What is E-commerce Business Insurance?

If anything doesn’t work out as you had hoped, business insurance will protect you financially and legally. By having business insurance, you lower your risk and safeguard your company’s assets, personnel, and inventory from a range of negative situations, such as damaged supply chains, and staff accidents. Your business strategy should include a section on insurance purchases.

Personal insurance coverage won’t cover items like your inventory, even if insurance aids in risk management. Your homeowner’s insurance won’t cover you if you keep your goods in your garage or home office. Other benefits of having company insurance, besides the tax reduction, include protection from:

  • Employees and customers, if a product causes injury
  • Cyberattacks and data breaches for your business
  • Inventory in the event of supply chain problems
  • Against damaged or stolen property
  • Defend against claims of contract breach from clients or suppliers

You must purchase commercial insurance after your company reaches a particular level of revenue to fulfill contractual commitments. Major retailers like Amazon and fulfillment hubs frequently demand a minimum level of liability insurance.

E-commerce Business Insurance Types

You might require one or more types of insurance to safeguard your small business, depending on your business strategy.

#1. General Liability Insurance Policy

If someone is hurt on your property or if you are sued for something like negligence or false advertising, general liability insurance will defend your company.

#2. Professional Liability (Errors and Omissions Insurance)

This insurance shields you from lawsuits brought against you for professional malpractice. You should think about getting this kind of insurance if your online business offers professional services like consultation or design work.

#3. Product Liability

It’s essential to get product liability insurance if you sell goods online so that you are covered in the event that your goods result in injury or property damage. Any e-commerce company that wants to operate must have this coverage since product liability lawsuits can be quite expensive.

#4. Business Property

This coverage aids in shielding business owners from monetary damages brought on by the destruction or loss of their commercial property. This can apply to property, machinery, supplies, and other corporate assets. If a business must shut down due to damage, commercial property insurance will aid in covering lost income as well as repair or replacement costs.

#5. Workers’ Compensation

Businesses are protected in the event of a work-related injury by workers’ compensation insurance, a sort of business interruption insurance. This insurance can provide substitute services in the event that an employee is unable to return to work while also helping to pay medical costs and missed wages.

#6. Transit

Damages that occur while the products are in transit are covered by transit insurance. This can involve damage that develops during shipping as well as during rail, road, or air transportation.
Businesses and people who ship goods can acquire transit insurance, which can provide protection against a variety of hazards such as loss, theft, and damage. When sending your items, transit insurance can provide you peace of mind and aid in preventing expensive repairs or replacements. Transit insurance is a crucial factor to take into account while delivering products.

#7. Cyber Security Insurance

It’s hardly surprising that cyber liability insurance has emerged as one of the most crucial types of coverage for these firms given their increased reliance on technology. You are protected by this type of insurance from monetary damages brought on by data breaches, hackers, cybercrime, etc.

#8. Business Interruption

Business interruption insurance also referred to as business income insurance, can assist in protecting a company’s finances in the event that it must shut down or halt operations as a result of an unforeseeable occurrence. Natural disasters, pandemics, and civil upheaval are frequently the root causes of business interruptions. Business interruption insurance can assist in covering missed revenue and costs like rent and employee salaries.

Best E-commerce Business Insurance

E-commerce companies require insurance to safeguard their operations, whether they are smaller brick-and-mortar shops without a warehouse or larger online retailers, individuals selling handmade goods on Etsy or Amazon, or online retailers in general. The top e-commerce business insurance carriers in the USA were discovered after we compared 20 suppliers, paying particular attention to their financial stability, the plans they offered, client satisfaction, and convenience.

#1. The Hartford

Hartford is the finest overall provider because it offers the full spectrum of coverage you require and flexibility in limits to match your business size, regardless of the size or style of your e-commerce operation. Due to its customer service, financial stability, convenience, and the policies it provides, it received the top rating in the review.

#2. Next Insurance

Next provides three insurance bundles for e-commerce companies: Basic, Pro, and Pro Plus. Pro, its most well-liked product, satisfies the criteria for Amazon seller insurance. Several quotes, including ones that are appropriate for and usable on other seller sites, like Etsy, can be generated by Next in a matter of minutes.
It is the finest supplier for merchants selling on Amazon because of its policies created to comply with their specifications, its quick quote and policy purchase, and the vast range of coverages it provides.

#3. Nationwide Insurance

In the USA, Nationwide Insurance has a long history of offering small e-commerce business insurance. For retail organizations with various endorsements, such as 10,000 for computer equipment or brands and labels covered, it provides a BOP that enables you to sell branded salvage. It can also accommodate a larger structure with coverage of up to 25,000 square feet and a $20 million total insurable value.
Nationwide is the perfect option for you if you own a physical-and-mortar company with a significant online presence or are an e-commerce retailer with a warehouse.

#4. Thimble Insurance

With tailored coverage in the USA, Thimble is a very practical e-commerce business insurance provider. By extending into the maker and craft sector and specializing in insuring small firms that produce handmade goods like soap, jewelry, and clothing, it adds to the insurance of drones.

The supplier aims to expand your business and offers limits as low as $500,000 and as high as $2 million. Thimble is the finest online retailer for you if you’re just starting out manufacturing and selling your products online.

#5. Hiscox

Hiscox is a specialist insurer for small companies. It has created plans specifically for owners of home-based enterprises and insures more than 500,000 small businesses. These policies include the possibility of a discount, limits that are more in line with your income and assets, and a cyber liability insurance program with a wealth of cybersecurity tools.

#6. Simply Business

An online broker called Simply Business focuses on locating insurance for e-commerce companies. It offers quotations from several highly regarded insurers so you can compare costs and coverage and select the plan that’s right for you.

You don’t need to phone or speak to anyone about it; you can get an estimate in 10 minutes or less and buy the policy online. But on weekdays, it has licensed agents present if you want to discuss it in person.

#7. Allstate

Your firm can be well protected from potential threats with the help of Allstate business insurance. Allstate has you covered whether you’re looking for property, liability, or workers’ compensation insurance. You can tailor your coverage with Allstate to meet the unique requirements of your company. They provide flexible payment methods and round-the-clock customer support.

Shopify Insurance

It’s not necessary to have small business insurance coverage if you’re one of the online sellers using Shopify. To assist shield you from liability issues, it is nevertheless advised that you get Shopify business insurance coverage.
This insurance coverage might aid in paying for claims made against you for property damage and personal injury. For instance, your product liability insurance policy may help cover the cost of replacing your customer’s home if one of your goods causes damage to it. Additionally, this policy may help with lawsuits for bodily harm brought against your Shopify company.

What Types of Shopify Insurance Are There?

Your Shopify store can be protected against claims of property damage and personal injury with the aid of Shopify liability insurance. Typical Shopify insurance requirements for small business owners include the following:

  • Having general liability insurance can assist shield your company from potential issues that might arise from regular operations. It aids in covering property damage and personal injuries.
  • Vehicles that you rent, lease, or borrow for work purposes may be covered by hired and non-owned auto coverage.
  • For assistance with covering mistakes and omissions in the goods or services you offer, consider professional liability insurance.
  • Product liability insurance, which helps protect your business from claims that your product caused property damage or bodily injuries.
  • Your company can be protected from technology-related hazards like data breaches with the aid of cyber liability insurance.
  • Workers’ compensation insurance can assist in offering significant benefits to employees who have suffered an illness or injury at work.
  • Commercial property insurance, which aids in defending the building you own or rent. Additionally, it helps safeguard your tools and equipment.
  • If a covered loss forces you to temporarily stop operating, business interruption insurance can help you make up for the lost revenue.

In order to secure the goods you send consumers while they are en route, several online businesses additionally decide to get shipping insurance. Comparing prices from many insurance providers is the best approach to locating the insurance coverage you require. You can look for insurance providers online and see what they have to offer.

What is Covered by Shopify Business Insurance?

Obtaining the appropriate business insurance protection, such as a general liability policy, is crucial if you operate an online store on Shopify. Business insurance for Shopify can assist with claims for:

  • Bodily harm or property damage: Your product liability insurance policy can help cover the claims if your products injure customers physically or damage their property.
  • Reputational harm: General liability insurance can assist in addressing malicious prosecution, defamation, libel, wrongful eviction, and privacy violations.
  • Advertising injuries: Claims of copyright infringement may also be covered by your general liability insurance coverage.
  • A professional liability insurance policy might assist in covering any errors or omissions you or your staff members may make.
  • Data breaches: Your data breach policy may assist cover the cost of notifying impacted customers.

How Much Does Shopify Insurance Cost?

General liability insurance coverage typically costs $1,057 a year. With our Business Owner’s Policy (BOP), many business owners also opt to combine business liability and property insurance into one practical policy. For small enterprises, this costs $3,135 a year on average.

Online Retailer Insurance

You’re in a growing industry if you run any form of online store. After all, research indicated that 33 percent of US adults shop online once a week, and 69 percent do it at least once per month. That represents a 24 percent increase from 2014. Get an online retailer insurance coverage initially if you want to be ready to profit from the expansion of this industry.

Online Retailers Need The Following Insurance

#1. Business Liability Insurance (GL):

You cannot avoid general liability just because you run your business online. When you purchase online retailer insurance, you should still have general liability coverage even if you work from a location that few people visit. If someone is hurt while they are a guest at your home, this section of your insurance will protect you.

General liability will cover their medical expenses whether it’s a friend who trips over the laptop cord at your office or a delivery guy who slips on your floor. If a consumer is injured while using one of your items, it will even cover the hospital expenses. If a visitor’s personal property is harmed while in your office, this coverage will also benefit you and your guests since this section of your online retailer insurance policy will pay for replacement or repairs as needed.

#2. Business Personal Property Insurance:

Damage to any premises connected to your business will be covered by the BPP section of your insurance. For instance, if there is a fire or other devastating incident and you have an office where you work or a warehouse where you store your goods, BPP will pay to fix the structure. The things within the facility are also covered by this portion of your online retailer insurance coverage because it will pay to replace any damaged items.

#3. Workers Compensation Protection:

They would certainly value workers’ compensation, whether you have a large staff or simply a few people helping you manage your online store. This is a crucial component of any online retailer insurance plan because its main objective is to cover your staff members’ hospital bills in the event that they sustain an injury while working for your company.

#4. Excess/Umbrella Liability:

Even if you have general liability insurance, if you don’t additionally carry excess liability insurance, you could be leaving yourself vulnerable to unforeseen costs in the worst-case scenario. For instance, excess liability will offer the extra coverage you require if an accident occurs on your property and numerous individuals are hurt.

#5. Cyber Crime Liability:

You’re not the only one who worries about how cybercrime can impact your online store. Since it is a fact, many business owners worry about it. But when you include cybercrime responsibility in your online retailer insurance, you can rest easy.

What Insurance Do You Need for an E-commerce Business?

Having general liability insurance can aid with claims that your e-commerce business injured someone or damaged their property.

How Much Does E-commerce Business Insurance Cost?

60% of our customers spend between $23 and $31 on average per month for general liability insurance.

What Does E-commerce Insurance Cover?

This commercial insurance is intended to shield your online store from third-party claims of any property damage or physical harm brought on by a product you produced or sold.

What Insurance Do You Need for an Online Shop?

What kind of insurance is required for an online retailer:

  • General liability. 
  • Product liability.
  • Business property insurance.
  • Workers’ compensation.
  • Transit insurance (or inland marine insurance)
  • Cybersecurity insurance.
  • Business interruption insurance.

Do I Need Business Insurance if I Sell Online?

You need business insurance if you sell goods online in order to safeguard your financial and legal interests. By having business insurance, you may reduce your risk and guard your assets against unfavorable events like supply chain accidents or employee theft.

Do I Need Insurance for Shopify?

It’s not necessary to have small business insurance coverage if you’re one of the online sellers using Shopify. To assist shield you from liability issues, it is nevertheless advised that you get Shopify business insurance coverage.


Time is money, as business owners in online shopping know that. By comparing more than 20 carriers, we were able to determine the top suppliers of e-commerce insurance, saving you time.


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