It’s simple to start an online company on third-party marketplaces like **Etsy, Amazon, and eBay**, but many sellers are unaware that these platforms frequently put **liability risks** on the seller.
It is essential to know what insurance policies are necessary, what each platform requires, and how to safeguard your company against claims, product problems, and litigation in 2025 if you want to sell through one of these platforms.
How can you maintain the legal and financial stability of your online store? Let’s have a look at the **best insurance tips** for sellers on third-party marketplaces.
The Importance of Seller Insurance for Marketplaces
Whether you’re an Etsy vendor, an eBay seller, or an Amazon seller of private-label items, you run the danger of:
* A client says your goods hurt them * Your stock goes missing or gets damaged in shipping * A hacker gets their hands on your customers’ personal information * A product liability lawsuit names you as a defendant * Defamation or non-performance may lead a buyer to sue you.
Unfortunately, **third-party platforms typically don’t cover you** in these cases, and the frequency of these events is more than many sellers know.
Insurance Requirements for Specific Platforms (2025)
Where can I get this? On Amazon.
If you are a professional seller and your monthly earnings exceed $10,000 for three months in a row, you are required by law to have commercial general liability insurance with a minimum coverage of $1 million. Your policy must also include Amazon.com Services, LLC as an extra insured. Liability for products, injuries, property damage, and advertising-related claims must be covered.
This is the **Etsy** website.
* As of 2025, there is no official insurance mandate; nonetheless, vendors have the whole responsibility for any claims or disputes involving products.
* I highly suggest purchasing both general business insurance and product liability insurance. Great for vendors selling things such as apparel, cosmetics, and handcrafted goods
The online marketplace ebay
There is no law requiring sellers to get insurance, however eBay does recommend it, particularly for:
It is highly suggested to get commercial liability and shipping protection coverage if you: * Sell high-value goods* Store or transport inventory* Engage in international sales
Sorts of Insurance That Third-Party Vendors Should Have
1. **General Liability Insurance** protects against claims made by third parties regarding injuries or damage to property. All online vendors should have this as a fundamental.
2. Protect yourself from claims involving dangerous or faulty items with **Product Liability Insurance**. Those who sell cosmetics, gadgets, toys, or consumables on Etsy or Amazon should pay careful attention.
3. Coverage for data breaches, legal bills, and reputational harm can be achieved with cyber liability insurance.
4. **Business Property Inventory Insurance**
This safeguards your inventory from several forms of harm, including theft, fire, water, and more, whether you store it at home or at a warehouse.
5. **Insurance for Business Interruption**
You will not lose money if your business activities are interrupted due to a disaster, such as a fire in the warehouse or a platform outage.
6. Coverage for products lost, stolen, or damaged during shipment to or from suppliers or consumers is provided by **Shipping and Transit Insurance**.
Tips for Choosing the Appropriate Insurance
If you sell fragile, regulated, or otherwise potentially dangerous products, you should assess the associated risks. Your exposure to risk increases in proportion to your sales volume. **Review platform guidelines:** Before purchasing an insurance policy, make sure it complies with marketplace requirements. **Compare insurers:** Seek out providers that focus on e-commerce or provide flexible online quotes. **Use a licensed broker:** This is especially important if you sell internationally or across multiple platforms.
Top Marketplace Seller Insurance Companies
Reliable e-commerce coverage is known to these suppliers in 2025:
**Next Insurance** – Online merchants can get quick quotations and digital-first coverage from **Thimble** – Thimble offers flexible monthly and short-term plans
**Hiscox** — Perfect for mom-and-pop shops and online retailers **Zensurance** (Canada) Coverage designed specifically for Etsy and Shopify vendors * **Simply Business** – Assists in comparing highly regarded insurance providers with tailored choices
Expenses Associated with Third-Party Sellers’ Insurance
The estimated yearly cost is as follows:
* General Liability: $300 to $800 * Product Liability: $400 to $2,000 or more (risk dependent)
\$500-\$2,500 for cyber insurance
$4,000 to $1,200 for commercial real estate
* Business Owner’s Policy (BOP) Bundle: ~$800-~$1,500
Products, sales volume, geographic region, and claim history all have a role in determining costs.
Ways to Preserve Your Safety
Make sure to maintain thorough records of your products, including receipts, agreements with suppliers, and any relevant paperwork. Make sure to label your products clearly and provide safety instructions. As your business expands, it’s important to review your coverage regularly. Consider adding marketplaces like Amazon, Etsy, or eBay as a **”additional insured”** on your policy. Stay informed about changes in marketplace policies and liability rules.
Last Reflections
There is a lot of room for maneuver and room for expansion when selling on sites like Amazon, Etsy, or eBay, but there are also some serious dangers involved. Get things done before problems ever come up. The ability to stay in business or go bankrupt due to a claim hinges on your insurance policy.
Before you put money into the protection your internet business needs, take stock of your risk, look into inexpensive plans, and make an investment. In 2025, a good policy can bring you peace of mind.