Do Etsy Sellers Need Business Insurance?

An Etsy business selling handmade bracelets displays their work.
| 06.02.22
Susan G.

Confession time: I love Etsy. Virtually all of my jewelry is from Etsy, especially since I was told I should be wearing silver instead of gold—a major jewelry overhaul. But it doesn’t stop there. Many of my small vintage paintings were purchased from Etsy sellers, and my family knows they can find my wishlist there. In short, I want to see you Etsy sellers succeed. A meaningful way to help you is to encourage you to protect your hard work with business insurance.

It may seem extreme to consider protecting your Etsy store business with insurance if it is a side job or hobby. It may not be!

How Business Insurance Helps Etsy Sellers

You may be surprised at how affordable business insurance can be for your Etsy business. You don’t have a physical storefront to insure, you likely don’t use your personal car for business purposes, and Etsy takes on the cyber risks unless you email customers outside of Etsy. All of these facts can help lower your monthly or annual premium. Overall, business insurance helps protect the long hours you put into creating and listing your Etsy best sellers and shipping them out, making it worth understanding.

What are the risks of not having business insurance for your Etsy store? You’re selling a product which puts your business at inherent risk. Whether you realize it, your product could cause a customer injury or illness. Some Etsy vendor products may even result in property damage. Without business insurance, you would have to pay to the extent that it might put your business…out of business! Your business could be sued, and you’d be responsible for the resulting legal fees. Not having business insurance is a gamble you may not want to take!

What business insurance should an Etsy seller consider buying? You’ll want a standalone General Liability policy to cover your Etsy business at a minimum. This kind of insurance policy typically includes coverage for product liability. Having product liability coverage means your business has a level of protection when it comes to your product causing bodily injury or damage to property. It is essential to know your policy limits to know your protection level. Basically, if your product causes a cut to your customer, you are protected up to your policy limit when you file that claim.

When it comes to instances like the destruction of expensive furniture, electrical fires, or rashes and similar reactions, the cost can be quite high. It gets more complicated if you do, in fact, also have a physical storefront for your business, or you want to cover the location in your home where you store your inventory. Your homeowner’s or renter’s insurance policy won’t cover the equipment and supplies you use for your business. In that case, you’ll want to obtain a Business Owner’s Policy or BOP. A BOP combines general liability with property damage coverage. It is convenient and comprehensive coverage!

If you engage in email marketing to support your Etsy business, you may also want to consider having cyber liability coverage. This standalone policy type would cover your business from the impact of a cyber-attack. Cyber insurance covers customer notification, PR, restoring lost data, legal review and defense, and lost business. You may think your risks are low being a microbusiness, but almost half of all small businesses suffered a cyber attack in 2018.

Where can you buy business insurance for your Etsy business? At this time, Etsy doesn’t offer any kind of business insurance policy to its sellers—the closest it gets is shipping insurance or seller protection. Neither of those includes product liability coverage. But it is fairly easy to obtain business insurance that includes product liability coverage right online! Search for small business insurance and get a quote!

Still not sure what insurance your Etsy business needs? Try the B2Z Coverage Tune-Up. It’s a quick quiz that helps clarify what kind of policies you may need for your unique Etsy business. If you already have business insurance for your Etsy business, you can read our tips on making sure your home-based business isn’t underinsured.

We hope this helps you understand the role of business insurance for Etsy sellers. Know that we’re cheering on your entrepreneurial spirit, and we wish you all the success in your endeavor!

About the Author

B2Z Insurance is a small business insurance company that provides coverage for on-the-go business owners: simple explanations, easy application, digital quotes, and mobile claims. A product that is easy-to-use and helps you assess the unique coverage needs of your business with confidence—freeing you up to grow your business.