Why is it hard to get insurance for an e-commerce business?
Product liability insurance is hard to get for an online seller when the insurer cannot see who else stands behind the product. The law can treat a seller that imports goods or sells under its own label as the maker, and the factory is often out of reach. Children's goods, a thin claims history and no written supplier contract add to it, and most of these have a fix.
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- The biggest worry is goods you import or sell under your own label, because a hurt buyer can come to you when the factory cannot be reached.
- Children's goods, ingestibles and animal-product goods narrow the field to specialist insurers.
- A written contract with the maker, safety paperwork and a clear claims history can widen your choices.
What makes an insurer hesitate over an online seller?
Seven things come up most. Business liability prices depend on what you sell and how risky it looks to the insurer. (Source: National Association of Insurance Commissioners) Each row below shows what worries the insurer, why, and what to fix first.
| What worries the insurer | Why | What to fix first |
|---|---|---|
| Own-label goods imported directly | You count as the maker, and the factory is out of reach | A written contract with the factory that names you and says who pays for a recall |
| Children's goods, supplements, ingestibles | Highest severity, and extra rules | Keep test reports and certificates; list these lines apart on the application |
| Fur, sheepskin, leather, down | Some insurers decline or exclude them | State their share of sales, their origin and any animal-product papers |
| Nearly all sales online | Some insurers send online-heavy sellers to an underwriter for review before quoting | Show sales by channel and what ships from where |
| A purchase order or spoken deal only | Nothing moves the liability to the supplier | Move to a written agreement |
| Little claims history, or few years in business | Fewer facts to price on | Three to five years of loss runs, or a signed no-loss statement |
| Repacking, kitting or relabeling in the U.S. | Changing the product can make you the maker | Describe each step and keep records |
These rows reflect what insurers commonly weigh. They are not rules any insurer publishes, and insurers differ.
Why does importing your own goods worry insurers most?
A seller that imports goods or sells under its own label can be treated as the maker, and a hurt buyer goes after whoever can be reached. When the factory is overseas, that is you.
Picture Maya, who sells children's desk lamps made overseas and shipped under her own name. A buyer's child is burned, and the family files a claim. The factory has no US office and no insurance she can find, so the claim lands on her product liability coverage. Her insurer asks for her contract with the factory, and she has only purchase orders. A written contract naming her and saying who pays would have given the insurer something to rely on. Maya is an illustration, not a client.
State law differs on this. Kansas shields a seller only when the maker can be served and would likely pay a judgment. (Source: Kansas Revisor of Statutes) Louisiana counts a seller that labels a product as its own as the maker. (Source: Louisiana Legislature) Washington lifts the seller's protection when the product is sold under the seller's brand name. (Source: Washington Legislature) Ask your attorney how your own goods are treated.
Why do some product types make it harder?
Because a bad product in these types can do the most harm: goods for children and babies, things people swallow or put on their skin, and goods that can catch fire. That narrows which insurers will quote, and some marketplaces add their own insurance rules for them.
Importers of children's products must certify that each one meets the safety rules. (Source: Consumer Product Safety Commission) Keep that paperwork and the test reports where you can find them, because an insurer will ask for them before it quotes. Read the insurance section of every seller agreement you have signed.
Animal-product goods are a smaller worry with the same answer. State what share of sales they are and where they come from, and an insurer can decide quickly.
Does one insurer saying no mean you can't be insured?
No. A no from one insurer usually means a different insurer or a different market fits better. Often one of those fits.
Standard insurers are licensed in your state. The surplus-lines marketExcess and Surplus Lines (E&S) Coverage from insurers your state permits but does not license, used for risks standard insurers decline. Insurers call this the excess and surplus lines market. more → is a separate market of insurers that can write what the standard ones decline, often at a different price and with different terms. Admitted and surplus-lines insurance are explained separately. A seller who fixes the first row of the table before applying often has more choices. For the full gap picture, see whether one policy covers the whole business. The common insurance mistakes online sellers make and the coverages an online seller needs go further.
What does Anvo ask an online seller for?
Six answers: sales by channel, who imports your goods, whether you have a written contract with the maker, what product types you sell, where your stock sits and your claims history.
Anvo works with online sellers who are already selling to customers, on their own site or a marketplace, including newer businesses and sellers who import their own inventory. It places accounts with standard insurers and, where needed, the surplus-lines market through wholesale access. It does not write a side business run from a spare room.
The importer is the business legally responsible for bringing the goods in. U.S. Customs holds it responsible for the entry papers and the duties, even when a broker files them. (Source: U.S. Customs and Border Protection) Knowing whose name is on your shipments is the answer agents need first.
The full list, with why each item is asked and where to find it, is in the quote checklist. Send what you have through the quote form or call +1 (913) 845-9688.
Frequently asked questions about getting e-commerce insurance
Often yes, through a specialist insurer. Expect more questions, keep your test reports and safety certificates on file, and list these products apart from the rest of your line on the application.
Not by itself. A purchase order says what you bought and for how much. It does not say who pays if the product hurts someone. A written contract can, so ask your attorney to review the wording.
Not always. A marketplace sets the least it will accept, which may not match the risks in your own business. Read the insurance section of your seller agreement, and ask your agent what the policy leaves out.
Ready to see which insurers fit your business?
Tell us what you sell, who makes it and where it is stored. We will take your file to the insurers that write online sellers like you.