Do I Need Business Insurance To Sell On Etsy? You may be good at crafts, and your friends ask you to make mittens for their cats, too. If so, you might be interested in Etsy to make some extra cash and show your artistic skills to people outside your book club.
Etsy has grown and grown over the last few years. It is a website where you can buy and sell very creative things. There are now more than 1.93 million sellers on the site who serve 33 million buyers each year. It’s now your turn.
You can’t just jump in, though. You need to know what to expect and be ready for things you could never have thought of. So, we’ve put together some helpful information about selling on Etsy and how to keep your crafty store safe and doing well.
Do I Need Business Insurance To Sell On Etsy?
Do I need business insurance to sell on etsy? The short answer is no, but it’s usually a good idea for businesses, including those that sell things on Etsy, to have business insurance to protect against possible risks and liabilities. Even though Etsy protects sellers in some ways, it is ultimately the seller’s job to ensure they have the right insurance for their business.
There are a few types of business insurance that sellers on Etsy might need, such as:
- Product liability insurance: This type of insurance covers damages or injuries because of a product a business sells, even if the product is defective or doesn’t work right.
- Liability insurance for professionals: This type of insurance, also called “errors and omissions insurance,” pays for damage or injury caused by a business’s mistakes or omissions.
- Property insurance covers damage or loss to the business’s physical property, such as inventory, equipment, and buildings.
- Business interruption insurance: This type of insurance pays for lost income and expenses caused by a disaster or disruption that stops the business from running.
Businesses should carefully look at their insurance needs and choose a policy that gives them the right level of protection for their business.
Should I protect my Etsy store with insurance?
Even if your wallet says “no,” good business practice says “yes.” You’re always taking a risk when you sell things to other people. People can sue businesses for almost anything, and they do. This is especially true if you sell something that could hurt someone. Even soaps with scents can give you a bad rash and make a customer mad.
If you have the right insurance, you can be protected from the following:
- Property damage
- Customer injuries
- Getting sick because of your product
- Flaws in the way it was designed and made
- Information leaks
Do Etsy sellers have to have insurance?
No, in a word.
You don’t need insurance if you want to sell something on Etsy. But you have to do it to protect your online store from things that could make it stop working.
Like if your stock gets stolen or broken and you can’t sell anything. Or a customer who wants to be paid back because something you made gave them a bad allergic reaction.
Solving these kinds of problems takes time and money. Also, they take you away from running your business day-to-day.
You can see a lot of lost money when you add up court costs, attorney fees, and lost income.
But the relatively small amount you pay for insurance as an Etsy seller goes a long way toward fixing these issues. It makes up for what went wrong, pays for any compensation you owe, and keeps you going no matter what.
What is included in Etsy seller insurance?
The things you make are safe.
Product liability insurance protects you if a customer gets hurt or their property is damaged by one of your products and sues you for damages.
Some things, like jewelry, cosmetics, body and bath products, candles, wax melts, kids’ clothes, food, and drink, are more likely to hurt someone than others, so they may need to be insured.
In other words, product liability insurance is a good idea for anything that can be eaten, swallowed, or put on the skin.
The same goes for anything with buttons, threads, or small pieces of fabric that could easily fall off and be eaten by a child or family pet.
Protection if someone gets hurt on your property
Public liability insurance for Etsy sellers covers claims made by anyone who directly contacts your business and gets hurt or hurts something.
For example, a courier who falls on your sliding doormat and breaks their hip, and has to miss work. Or Joe Public wants you to pay for hurting them when your market stall falls over and hurts them.
It’s like product liability insurance in that it pays for your legal fees and a lawyer, as well as any damages you’re responsible for paying.
It’s a must-have if you sometimes sell at markets and craft fairs, as many places require it to be able to sell.
For the safety of your employees
Employers’ liability insurance is required by law if you hire people who are not related to you. It covers your employees if they get sick or hurt on the job, even if they are only temporary, part-time, or volunteer workers.
Useful if you hire someone else to help pack and ship your goods and your dog bites them. Or they cut themselves with a craft knife that got out of hand and needs stitches and time off work.
The Health and Safety Executive can fine you £2,500 for every day you don’t have it, which is enough to make any employer sit up and take notice.
Protection for your business and its goods
Stock and property insurance pays to replace stock and lost, stolen, or damaged equipment. Business interruption insurance pays if a fire, flood, or other event stops you from doing business.
For example, if a pipe breaks and floods your store, ruining all your goods and destroying your PC or laptop. Or if your internet goes down and you need help getting online to fill orders.
In both cases, your policy will pay for the total amount of stock that was lost or damaged. It also pays to set you up so you can temporarily run your business from somewhere else, and it covers your lost profit while you’re out of action.
If I don’t get Etsy seller insurance, what will happen?
If you don’t get insurance, technically, nothing will happen, but a lot could. And if you don’t have the right protection, you’ll be in danger.
“Insurance protects your personal assets, especially if you’re not incorporated. If you make a mistake in business and don’t have insurance, your whole personal estate is at risk.” Paige Murray is the main insurance agent.
So, before you decide not to buy insurance, consider whether selling a few handmade items on Etsy without insurance is worth losing everything you own.
Conclusion: Do I Need Business Insurance To Sell On Etsy?
Businesses, like those that sell things on Etsy, are not required by law to have insurance. But it is usually a good idea for businesses to have insurance to protect them from possible risks and liabilities. Even though Etsy protects sellers in some ways, it is ultimately the seller’s job to ensure they have the right insurance for their business.
Etsy sellers may need business insurance, such as product liability insurance, professional liability insurance, property insurance, and business interruption insurance. Etsy sellers should carefully look at their insurance needs and choose policies that give their business the right level of protection. Even though insurance isn’t required, it can save a business a lot of money if something covered goes wrong.