Etsy insurance

What Type of Etsy Insurance Do I Need?

Benefits of Etsy business insurance:

• It can protect your business from certain claims.
• It can help cover damages caused by your work.
• Proof of insurance can help clients feel good about using your business.

Do I Need Business Insurance to Sell on Etsy?

Etsy doesn’t currently require that you have insurance to sell or operate an online store. However, if that sounds like you’re off the hook, think again.

As a business owner, it’s up to you to set your business up for success. And that means protecting it with Etsy business insurance. People sue businesses for many reasons, which is why you may need to protect yourself with more than one policy.

Here are three types of policies we typically recommend for Etsy sellers to consider:

Ecommerce insurance

As an online merchant, you may not be interacting with your customers. But your customers are interacting with your products, which can potentially lead to product liability claims. That’s why you need Ecommerce business insurance, which typically includes general liability insurance (also referred to as “GL” insurance).

A GL insurance policy typically helps cover incidents such as:

• Third-party bodily injury
• Third-party property damage
• Product liability
• Advertising injury
• And more

For Etsy sellers, product liability coverage is especially important since it may protect you in the event a customer claims that a product from your Etsy store caused them damage in some way.

Let’s say you sell men’s grooming products. A customer purchases your beard oil kit and breaks out in a terrible rash after using it. The beard oil contains coconut oil, which he is allergic to. Unfortunately, you didn’t list that ingredient in the description on your Etsy page.

As a result, the customer sues your Etsy store. In this scenario, you’d likely be financially responsible for the cost of the claim, plus legal fees, if you have to defend yourself in court.

Did you know that the average cost of a product liability claim can be in excess of $7 million? That’s enough to put a small Etsy store out of business! However, with general liability insurance, there’s a good chance you won’t have to pay out-of-pocket expenses.

GL insurance can cover a lot of the risks you face as an online business, including financial damages you’re ordered to pay as a result of a covered claim and attorney’s fees (up to your policy limits).

There are other benefits to having Ecommerce insurance. It also can help reduce many financial risks you may face for claims associated with advertising injury, and third-party accidents.

Cyber insurance

Small businesses are attractive targets for hackers, and just one cyberattack could put an end to your online business. That’s why we recommend cyber insurance for Etsy sellers.

Cybercriminals can wreak havoc on your business. They can steal the personal and financial information of your customers, employees, or vendors. Or they can steal directly out of your account by posing as a bank or vendor.

Another type of malicious attack is ransomware, which can send your business into crisis mode. Ransomware is when a hacker locks and encrypts your data then demands payment to restore your access. As an online seller, you can’t run your business without control of your computer system.

If you think a cyberattack won’t happen to you, consider that there were around 236.1 million ransomware attacks during the first half of 2022. As a small business owner, you can’t afford to lose thousands of dollars to hackers. Cyber insurance can help cover many of the costs associated with cyberattacks, so you can keep your Etsy store running.

Here’s what cyber insurance usually helps cover:

• Crisis management expense
• Forensic and legal expense
• Fraud response expense
• Extortion loss
• Public relations expense
• And more

Cyber liability insurance usually does not cover:

• Potential future lost profits
• Cost to improve system security
• Loss of intellectual property value due to theft
• And more

Workers’ compensation insurance

If you have employees working for your Etsy store — even if they’re part-time or temporary — you may need to get workers’ compensation insurance. In most states, employers must carry workers’ compensation insurance when they hire their first employee.

Workers’ compensation is insurance coverage that can cover an employee’s medical bills — as well as lost wages — if they get sick or injured on the job.

For example, let’s say your Etsy shop sells custom-made furniture, and one of your employees falls off a truck while delivering a large coffee table. He breaks his arm and heads to the hospital, where he’s put into a cast and instructed to take several days off from work.

In this scenario, your workers’ comp insurance policy could kick in and pay your employee’s medical bills (including rehabilitation expenses), since they were injured while working for you. Workers’ comp could also cover your employee’s lost wages.

Workers’ compensation insurance typically covers:

• Medical payments
• Lost wages
• Rehabilitation expenses
• Death benefits

Why Do I Need Etsy Business Insurance?

While you may not be required to carry Etsy business insurance, operating without it can be extremely risky. Did you know 43% of small business owners say they’ve dealt with lawsuits or the threat of one? If your business is sued, it could be financially devastating to your Etsy store.

You’ve invested time, money, and dedication into selling your products on Etsy. Business insurance ensures that you stay protected. At Simply Business, we’ll help you find a plan that fits your needs and your budget. We keep you covered so you can keep running the business you love.

And it’s easy to compare quotes online. Just answer a few questions about your business to get started. At Simply Business, we make getting insured simple!