Is insurance required for selling on Etsy?

So you have finally found time to turn that hobby, pastime or just that really good idea into something more lucrative?

What could possibly go wrong?

You may well ask, so many things actually, but they aren’t really at the top of your priorities we guess right now are they; after all, you have so many things that you need to be doing like marketing, uploading products, and of course the products don’t make themselves, and  anyway you have only started selling the odd thing and, well the risk is minimal.

Everything is good in your new burgeoning Empire… until that is, it isn’t.

Do I need insurance for selling on Etsy?

In a word, no, selling your products on Etsy, there is no requirement to have insurance; that doesn’t mean you should sit back, relax and hope everything is good. Not having insurance though, selling on Etsy or other online platforms for that matter, is a little like having to sleep with one eye open; you know there could be a danger, and it could come at any time.

When you make stuff, you might put your best care and attention into how it goes together, but there is always that chance that something might go wrong with the product; the wheels on your wooden toys could really fall off, metaphorically speaking, of course.

It’s essential that, as a maker, you protect yourself where there is a possibility that things could go wrong. Having essential insurance cover in place is an excellent start. For instance, having Product Liability insurance is like someone watching your back whilst you get on with what you are best at.

Product Liability Insurance for selling on Etsy

The critical protection for selling on Etsy is Product Liability; it protects you against allegations that your product has caused damage or injury to a third party, a member of the public, for instance.

It will provide you with legal defence cover. If it’s found that your product has caused loss or injury, your insurer will pay compensation to the person who has made the claim too.

The soap you have been selling for years, whilst it might comply with all the relevant legislation, it’s been through testing, but it doesn’t mean that it’s harmless; you have received a claim for a skin reaction; what now?

That particular hair care product that everyone loves, there is always one that isn’t there, the one that your product has turned the user’s hair pink… well, you get the idea.

The point is that you can make sure your product meets every requirement, but that doesn’t mean someone isn’t going to attempt to make a claim against you; without having Product Liability in place, you are going to have to defend the claim yourself, and even if you are not responsible how much has it cost you, just for the legal costs…

Thinking that you can rely on Etsy to come to your rescue isn’t going to happen; they won’t.

How much product liability is required to sell products on Etsy.

This is about you; remember, having insurance cover to sell on Etsy is optional, so no one states a minimum amount you must have.

Product Liability usually comes in various limits, referred to as Limits of Indemnity; it’s your choice as to how much you have, with limits starting at £1m and increasing through £ 2 million to £ 5 million and above if required.

Can I buy just Product Liability on its own?

You can, but you need to have considerable turnovers for it to be cost-effective. Product Liability usually comes packaged with Public liability; you usually buy both together on one policy, referred to as Combined Liability insurance.

What is Public Liability and is it necessary when selling on Etsy?

As a business owner, there are not many instances where Public Liability would not be required; coming into contact with the public means that if anything happens to them where you could be held responsible, loss or damage to their property or even worse, injury, Public Liability will defend you and pay any compensation.

Just because you sell online on Etsy doesn’t mean you don’t have exposure. Supplier representatives coming to your home or business premises, the delivery guy who trips over a pallet, or a pile of boxes, a slip on your office floor. If you go to exhibitions, it might be a requirement by the organisers that you are covered; the possibilities are endless.

Do I need Employers Liability as an Etsy seller?

In simple terms, if you have someone to help you in your business, then it’s usually a legal requirement that you must have employer’s liability in place.

However, this can become quite complex, so it’s worth investing a little time to ensure that you meet the legal requirements; a handy piece of information is available on the HSE website.

Pop over to the HSE website here for a full explanation – https://www.hse.gov.uk/pubns/hse40.PDF the important bit is on page 4.

I need to cover my Etsy business contents. How do I do that?

If you sell physical goods on Etsy, you will no doubt have premises for storage; this might be a small unit or somewhere secure. Depending on your business, you might have machinery you use for manufacturing; these can all be protected against perils such as flood, storm, fire and theft.

Delivering your products to customers?

Whether you manually deliver or send by a carrier, you need to know what the business doing the moving is actually insured for.

It’s not wise to assume they will cover your goods to the total value, so it’s worth checking their terms and conditions.

Your goods can be covered whilst in possession of the postal service or carriers; these can be protected under a Goods in Transit insurance policy, or for shipping worldwide, then a Marine policy might be more applicable.

Don’t assume you are fully covered – check your carrier’s terms and conditions.

Many other business protections are available for Etsy Sellers; Legal Expenses Insurance can prove invaluable; not only can it protect you against Contract Disputes and Tax Investigations, but if you do employ people, it’s crucial that you have cover for Employment Disputes.

In summary

Running an Etsy business can be very enjoyable and rewarding; however, just sitting back and reaping all the rewards without one eye on the risks could soon put the dampeners on your budding Empire, even before it really got going.

Speak to us about your business insurance requirements; we are experts at dealing with businesses that sell on Etsy and Amazon, as well as online traders.