Online retail insurance – expert Q&A Online retail insurance – expert Q&A

What do online sellers need to know about insurance?

Whether you're side-hustling on Etsy, dropshipping via Shopify or running a full-scale ecommerce brand, selling products online comes with risk. From damaged stock and stolen goods to legal claims over faulty products — things can (and do) go wrong.

That’s where online retailer insurance comes in.

We spoke with our in-house expert, Assistant Underwriter, Olivia Orringe, to answer key questions about online seller insurance and how our ecommerce cover works — whether you're a one-person maker or scaling a global brand.

Why should online sellers consider insurance?

If you’re running an ecommerce business, insurance can help protect you against the financial risks that come with selling physical products.

For example, if:

  • A customer claims a product caused them harm
  • Your stock is stolen or damaged
  • You’re held responsible for third-party injury or property damage

You might think you don’t need to consider insurance — but when something goes wrong, it’s often the unexpected that hits the hardest. Online seller insurance is all about giving you confidence to grow, knowing you’re covered.

What’s changed in online retail insurance recently?

In recent years, there’s been a big shift in the cover online sellers can buy. More people are selling online — sometimes to top up income, sometimes as a full-time business. But until recently, there wasn’t a proper insurance product for online retailers.

Before, many sellers ended up with shop insurance designed for bricks-and-mortar retail or commercial combined policies that are too broad or restrictive.

The online retail insurance that Superscript provides aims to match how ecommerce businesses actually operate — especially dropshipping, which traditional insurers often won’t touch.

What type of online sellers is ecommerce insurance for?

At Superscript, we offer cover for a wide range of ecommerce models, including:

  • Home-based crafters selling homemade goods
  • Private label brands repackaging or rebranding existing products
  • Dropshippers shipping straight from manufacturers (often overseas)
  • eBay and Amazon sellers or Shopify or WooCommerce store owners
  • Multi-channel sellers using marketplaces and their own site

If you're buying, storing, selling or shipping physical products, it’s wise to consider insurance as a part of your business plan.

What is the biggest risk if I don’t have ecommerce insurance

The risks you can face as an online retailer really depends on your product and setup.

For a jewellery maker, you could have a large amount of high-value stock. In which case, your main risk would probably be theft or accidental damage — especially if you store it at home or a third-party fulfilment centre.

If you sell products that could potentially be dangerous to customers — like cosmetics, supplements or anything electrical — your main risks are likely to be around legal claims, if someone is injured or their property is damaged.

And if you export to the USA or Canada, the risks could be even higher. These regions have much more litigious legal systems, where compensation — and legal costs — can skyrocket.

What our expert says

Olivia Orringe, Assistant Underwriter

Historically, there hasn’t been a specific type of insurance tailored to the needs of an online retailer, and these risks have been placed under a commercial combined or shop policy, neither of which is really suitable.

What other covers do ecommerce businesses typically buy?

Depending on the size of your business, customers might also take out employers’ liability insurance. This is the only cover that is usually a legal requirement for businesses that employ staff — whether part-time, full-time, volunteers or apprentices.

Without this cover in place, you could be fined up to £2,500 per insured day. Employers’ liability is designed to provide financial cover in case one of your employees is injured at work.

It might also be worth considering:

All of these can usually be added to your online retail insurance quote.

What makes online retail cover from Superscript different?

There are a few things that really set the cover you can buy from Superscript apart:

1. No need to list every product: We don’t ask for a full product breakdown. Instead, we ask about your business model (e.g. dropshipping, manufacturing) and apply a clear exclusion list. If it’s not excluded, it’s covered.

2. Cover for stock outside your control: You’ll be able to include optional cover for stock stored:

  • At home
  • In third-party fulfilment centres
  • In transit via your own vehicle or a courier
  1. Flexibility to grow: No more policies that restrict you to a narrow product range. Instead, let your business evolve without needing to update your insurance every time.

What is a common misconception about online retail insurance?

A lot of sellers think: “I’m just reselling — I’m not responsible if something goes wrong.”

But the truth is, if you’re part of the supply chain, you could still be liable — especially if:

  • The manufacturer goes out of business
  • There’s no one else for the customer to claim against
  • Your name is associated with the product

It’s a risk that catches many new sellers off guard.

What is an example of a situation in which this cover might pay out?

Let’s say a customer claims that one of your products caused them harm — like a burn from a faulty charger or a skin reaction to a beauty product.

If you’re found legally liable, your product liability insurance could cover:

  • Compensation costs
  • Legal defence
  • Court fees or settlement agreements

Does this cover protect Amazon sellers?

Yes. Amazon requires sellers to have product liability insurance if they’re exporting more than $10,000 (about £8,000) a month to the US.

An online seller's insurance policy is built to support this, including:

  • Add Amazon as an additional insured
  • Cover claims brought in UK courts or where the governing law is UK-based
  • Help sellers stay compliant with marketplace terms

Want to know more?

This content has been created for general information purposes and should not be taken as formal advice. Please always refer to your policy documents for full details around exclusions, terms and limits of your customised cover. Read our guide to understanding your policy documents.

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