April 9, 2014 by Andrew Minalto - 88 Comments

Public Liability Insurance – What For?

insurance-for-ebayInsurance – it’s an important consideration for every business, but do you really need it if you’re selling online? After all, it’s not like you have a shop or office where customers come… in fact you may not deal face to face at all. So in that case – public liability insurance, which is something that most traditional businesses have, would be a useless and unnecessary expense, right?

Well, not quite… there are still many reasons why you may need business insurance, even if you only operate online.

When you sell items online, such as electronics, clothing, cosmetics, hair-care products etc. (anything really!), you are legally responsible for any damage or injury caused by those products.

Let’s say you sell specially made birthday cupcakes online and one day one of your buyers blames you for food poisoning… or you sell unbranded mobile phone chargers and someone says their house fire was caused by your faulty product… what then? How will you cover the legal fees defending yourself, never mind any potential compensation you have to pay?

This is even more important for sole traders as covered in this blog post, a sole trader is personally responsible for all business liabilities. So it’s not even a matter of your business going bust, you yourself can be bankrupted by a claim like this!

So suddenly insurance doesn’t seem like such a frivolous waste, but rather something that you need to cover you in case of such an occurrence.

But the problem is, as I mentioned earlier, this is not something that would be covered under public liability insurance – so what type of insurance do you need? After all, the only thing worse that having no insurance is paying for something that won’t even cover you when you need it!

So let’s quickly run through a few of the different types of business insurance available and go over what exactly they cover.

Public Liability Insurance

public-liability-insuranceGenerally the most common form of business insurance for traditional B&M sores, public liability insurance covers you and your business against claims for accidental damage caused to property or an individual on or around your premises or as a result of your business activities.

For example, let’s say you have a retail store and one day one of your customers slips on a carpet and breaks their arm. They would be within their right to sue you for compensation and public liability insurance would cover you for the cost of legal fees, medical bills and any additional compensation awarded.

How much cover do you need? Well this will depend on each business individually but generally cover starts from £1m, going to around £5m.

And just to clarify something as there seems to be some misconception about this: you are NOT required to have public liability insurance and there is no law that stipulates it is a requirement for a business to be covered. However – you’ll often find that contracts and other companies you deal with often insist you have a certain level of cover. For example, if you work with local authorities they may insist on £5m or if you’re renting business premises the landlord may require proof of your insurance.

Product Liability Insurance

product-liability-insuranceUsually the most important part of business insurance for online eCommerce store owners or eBay sellers, product liability insurance covers you for any damage or injury caused by a faulty product that your business designs, manufactures, or supplies.

As in our earlier examples of selling cupcakes or phone chargers imported from China, product liability insurance is a must-have.

If the manufacturer is based in the EU and you only sell the goods, you may not be legally responsible under certain circumstances but remember; the contract is always between you and the buyer so even then you would need to cover the initial legal fees associated with any claim, before you can pass it onto the manufacturer.

So unless you plan on keeping a large reserve of capital for this, I always recommend making sure you’re completely covered when selling online.

Plus there are a lot of specific requirements you have to cover to not be responsible as the retailer (the product can’t have any of your own branding for example.) so most of the time you will be liable anyway.

Once again, most insurers offer cover between £1m and £5m for product liability.

One important thing to note when looking for product liability insurance is that it is usually sold under public liability – so they come as a ‘package’ and you can’t get one without the other.

That’s fine and all it means is that you’re covered both ways.

Stock Cover

stock-cover-insuranceAs the name suggests, stock cover is insurance for the stock you keep before selling it (whether that’s in a warehouse or your own home). Stock insurance will cover you for the cost price (not selling price) of your stock should it be damaged, destroyed or stolen.

Again this is a very important part of business insurance for an online seller, as loss of stock is something that can bankrupt your business, if you’re not properly insured.

The last types of insurance I want to cover are legal requirements for any business (whether offline or online).

Employers’ Liability Insurance

employers-liability-insuranIf your business has any employees (including part-time/casual staff, temporary/seasonal workers, students etc), then you are legally required to have Employers’ Liability Insurance. This covers you for the cost of legal fees and any compensation if your employee becomes ill or is injured as a result of the work they carry out.

The legal minimum amount of cover is £5m.

Fines for not having appropriate insurance can be up to £2,500 a day so make sure this is all in order if your business has any employees!

Third Party Motor Insurance

motor-insuranceLastly, if your business uses motor vehicles, then you are legally required to have insurance that covers at least £1m for property claims and an unlimited amount for personal injury.

So that’s it! Those are the main types of business insurance (specifically for online sellers) plus the insurance you’re required by law to have if your business falls under certain conditions.

But where exactly do you find these ‘specialist’ types of insurance? That’s a good question as oddly enough most ‘traditional’ insurers don’t cover eBay or eCommerce businesses, despite the fact that online sales are expected to reach £45 billion pounds and more than 13% of total retail sales in 2014.

The best way to get business insurance as an online seller is to contact insurance brokers either online or through the yellow pages. Just look for companies that mention business or commercial insurance and then call them up to ask about cover for your home business.

Please remember – always give EXACT and accurate details so that you’re properly covered and ensure you fully understand the terms you have to adhere to.

For example:

  • Your product liability insurance doesn’t cover you for any products sold to the USA.

OR

  • Your stock cover doesn’t cover you for any stock stored in a room with a window.

You need to be completely aware of any exclusions or terms in your policy to make sure you have the right cover for your business.

And of course, shop around and speak to a few different brokers – you don’t want to just go for the cheapest price but it’s always best to speak to as many insurance providers as possible to compare the different products they offer, their policies, excess and of course premium.

So that’s it from me in this guide, but if you have any questions feel free to post them in the comments box below and I’ll do my best to help. But please bear in mind as this is a legal issue I will not always be able to offer advice so if your situation is very specific or you need exact information, it may be best to speak to a professional who will have the expertise to advise you further.

Until next time!

Thanks,
Andrew

88 Comments
Click Here to Leave a Comment

  1. Hi
    Thanks for such an informative post. I have a question which I’m wondering if you could clarify?
    I am just setting up a small business to sell essentially a small ’emergency’ kit for women to keep in their handbags. I plan to sell at craft fairs and online via a website. NB the business isn’t registered yet as I wanted to do an initial couple of fairs to see if there is an interest prior to investing more.
    A local tailor is making the bags at this time and I am buying the contents in semi bulk from ebay / Amazon.
    I have been advised that not only do I need public liability insurance for a small local gift fair, but when I asked a question of the company supplying me with a quote, they also said that my suppliers should have it too. I have contacted some of them so far and non of them have it and have advised me to contact he manufacturer directly. Is this correct that I would need my suppliers even though I’ve only bought a few part to date, to have PL insurance in order for me to gain insurance?
    Also as the kit may contain eyelash glue and nail glue (both very clearly marked up as to purpose) where would I stand out of interest of a customer mixed the two up and had injury due to putting nail glue on a false lash? Would I be covered for this? Can I get around this by putting a disclaimer on a tag and on the website confirming words to the effect of products to be used for intended purpose only?
    Many thanks in advance

    1. Andrew Minalto

      Hi Natalie,

      Thanks for your comment.

      Unfortunately I don’t know the answer to your questions – this is a very complicated topic with lots of mixed views and opinions.

      I’m really sorry, wish I could help you more but you should seek professional advice, contact insurance companies who could help you more with this specific situation.

      Thanks,
      Andrew

      1. Hi Andrew
        Thanks for getting back to me! One company have contacted heir underwriters who have advised they wouldn’t cover the contents of the bag, only the handmade part (or the actual bag) but I will try further companies and see what information I can find.
        Thanks again
        Natalie

  2. Hi Andrew,

    I’m looking to start importing coffe pod machine stands/pod holders from China, to sell via EBay/Amazon in the UK.

    The brokers I have spoken to have told me most insurers won’t I sure me as I’m importing from China. I have spoken to British Insurance Brokers Association who told me there may best be insurers willing to inure me if I get ‘rights of recource’ from my Chinese suppliers. I have asked the supplier about this and they seem to have no idea what it is!

    My questions would be:

    a) Is product liability insurance legally required in this case for these products?

    b) They are very low risk items in terms of potential personal injury or property damage,is it worth taking the risk not being insured?

    c) In your experience am I likely to get ‘rights of recourse’ from a Chinese supplier, what’s the best way for meto go about this?

    Thanks in advance
    Oli

    1. Andrew Minalto

      Hi Oli,

      Thanks for your comment.

      I don’t think you require insurance by law, from what I understand, for these products BUT you can still be liable if something goes wrong, people get injured and raise a claim. I’m not an expert on this topic though so can’t 100% say it’s how it works.

      Law is very vague on this and obviously 99% sellers on eBay don’t have insurance.

      BEST way to protect yourself would be to register an Ltd. company (if you don’t have one already) – this way, in worst case scenario, your personal assets are secured and only company can be held responsible.

      Sorry, I wish I could give more advice but there’s lots of GREY AREAS when it comes to product liability insurance and there are no solid information online that clearly tells what and when we should do.

      Thanks,
      Andrew

      1. Hi Andrew,

        Thanks for your reply.

        You are right, the info online is all very vague and confusing.

        I’ve asked a few Chinese suppliers about ‘rights of recourse’ and they have no idea what it is…says it all!

        I was thinking setting up a Limited Company would be a good idea so its good to know you agree.

        Thanks again
        Oli

  3. Alexis Tomlin

    Hi Andrew,

    After reading your article with interest, I decided I needed to get Product Insurance as I sell cosmetics online, and began worrying about what would happen if someone reacted to a product I sold.

    I spoke to an insurance company today to be told that I do not need insurance which completely contradicts your statement

    ‘When you sell items online, such as electronics, clothing, cosmetics, hair-care products etc. (anything really!), you are legally responsible for any damage or injury caused by those products.’

    This only applies if you make your own cosmetics, electronics, clothing, hair-care product etc, but NOT if you buy them at wholesale or wherever and then sell them on, you are ONLY liable if you create them yourself. The manufacturer is liable not the retailer. I spoke to a couple of different insurers who both tols me the exact same thing.

    It was rather nice however, to be told by an insurer that in fact I didn’t need anything from them and to have a nice day – makes a change.

    1. Andrew Minalto

      Hi Alexis,

      As I explain in the guide, this is the case IF you buy from Uk/EU based suppliers but NOT if you import products from outside EU (China etc.).

      At least that’s how I see it written in the law/guidelines…

      Andrew

  4. Hi Andrew,
    I have just started selling products on e bay such as bath bombs oil burners
    Candles. I buy my stock from a reputable
    U.K. Company , some of which is made in China
    Would I need insurance .
    Thanks Hannah

    1. Andrew Minalto

      Hi Hannah,

      Yes, you’ll need product liability insurance unless all those products are being insured already in the UK by wholesaler? And you have some kind of agreement with them in place? Not sure it works that way though….

      Andrew

  5. Hi Andrew

    I am selling horse fur eyelashes imported from China, these are sold as hypo-allergenic but of course i am worried of potentially being sued should a reaction occur which could be devastating to me as i am a registered sole trader. Do you recommend obtain product liability insurance, if so are you aware of any brokers that would be happy to cover me?

    Thanks

    Emma Rose

    1. Andrew Minalto

      Hi Emma,

      With a product like this, yes, you probably want to get a product liability insurance.

      I can’t recommend anyone particular though.

      Thanks,
      Andrew

      1. I have just set up an online store to sell feather eyelashes imported from China, I was also going to provide a glue with the lashes which is also imported from China…problem is no insurance company seems to want to insure me due to items being from China, is it possible to just go ahead and start selling the eyelashes without the glue and insurance, I can only see there being a problem if the glue caused a reaction?…I’m now just stuck with stock not knowing whether I can sell or not…any advise would be great 🙂

        1. Andrew Minalto

          Hi Kevin,

          Why not get the glue from a EU based manufacturer, who will have the product insured already?

          Plus this way you know 100% that glue is compliant with European directive of cosmetics.

          Andrew

  6. Hi I am selling iPhone chargers on Amazon, would I need to be an LLC to do so? What insurance would I need? Thank you!

    1. They are imported from China.

    2. Andrew Minalto

      No, LLC is not mandatory.

      But yes, with items like these you MUST have a product liability insurance.

      Andrew

  7. Hi Andrew,

    I would appreciate your opinion, please, on whether or not I would need Public Liability and / or Product Liability Insurance for selling records / cassettes / CDs on eBay?

    If so, are you aware of any comparison website that could provide such quotes for eBay traders?

    Many thanks,

    Chris.

    1. Andrew Minalto

      Hi Chris,

      No, as far as I know, you don’t need product liability insurance for such products.

      Not talking about public liability insurance (it’s optional even for B&M shops).

      Andrew

      1. Thanks Andrew, that’s very useful.

  8. Hi,

    Your opinion on insurance when selling books online (online bookstore) new and.or used.

    Can’t think of much a book could do to harm – but these days someone may find a reason?

    Thanks
    James

    1. Andrew Minalto

      Hi James,

      I don’t think you need insurance when selling books, no.

      Andrew

  9. Greg Whitehead

    Hi Andrew.

    I currently sell through Ebay Ex Display items that have mainly been on display in large uk retailers or their soiled goods. Items like a dirty rug or mattress. Scratched lighting or furniture etc. Sometime last years fashion i.e coats or shoes. So goods are new but seconds.

    But now Im building my own e commerce website to sell these items direct.

    As they are all recognizable brands and come from UK high street retailers. Would I need any type insurance to cover these activities?

    Your advice would be greatly appreciated.
    Thanks Greg

    1. Andrew Minalto

      Hi Greg,

      I’m not sure to be honest.

      Theoretically no, you don’t need product liability insurance for these products as they’re sourced from UK but I’m not 100% sure.

      Andrew

  10. Hi Andrew,

    Great post.

    What kind of eBay specific challenge would you like to see an insurer offer which isn’t covered in the general business and online selling policies in the market?

    Best,

    Nick

  11. Hi there, Im starting my own online party supplies for kids, weddings,baby showers etc.
    Will i need to get Product liability insurance?
    this is all very new to me. so unsure,
    many thanks kylie

    1. Andrew Minalto

      yes, you’ll need insurance for products like these.

  12. Hi there.

    Thanks for the article, Andrew. I wonder if you can help me.

    As an independent distributor for Kleeneze selling on eBay, will I need a form of Product Liability Insurance if I sell:

    Scenario A –
    only branded electrical goods?

    Scenario B –
    both branded and unbranded electrical goods?

    Scenario C –
    Kleeneze’s full catalogue of both branded and unbranded goods ranging from electrical, bedroom, bathroom, kitchen, garden, clothes, etc.?

    All goods would go from their warehouse directly to the customer.

    1. Andrew Minalto

      Hi Nigel,

      No, I don’t think you need product liability in this case as Kleeneze already have insurance in place.

      Andrew

      1. Cool. Thank you for the quick reply.

  13. Hi, We are a hobby craft company and very small sellers. We have PLI as we were attending fayres but are now planning to just sell online, we make and sell jewellery, hand decorated ceramics and paper crafts. Do we need to renew our policy or could we cancel it and save the money?

  14. I have had a business on Ebay for 10 years but I never considered getting product liability insurance as I do not make a huge wage doing this and all the information I found stated it would be very expensive.

    I am a sole trader and I sell second hand toys on Ebay and I run my business from my home. The items I sell are mainly action figures from the 1980’s to present. I sell these items all over the world but mainly to the UK and Europe. I buy my stock in lots from UK private sellers on Ebay. I have always done my very best to make sure the items I sell are clean and are not broken or damaged so not to hurt anyone. Some items are battery powered but I do not sell mains powered items.

    Do you think I would require Product Liability insurance for the business and if so what kind of price range would I have to pay for it?

    1. Andrew Minalto

      Hi Mark,

      I’m not an expert on insurance but I highly doubt you need product liability for such small business selling 2nd hand action figures.

      Thanks,
      Andrew

  15. Hi,

    I found this really interesting. I am setting up an online marketplace selling cakes and bakes made by other people. I have looked into insurance but one company I spoke to today didn’t really seem sure what to make of our business. What would you suggest in terms of protecting the business from claims should anything go wrong with the products we supply? For exhibitions, I understand we need public liability insurance, we don’t hold the stock ourselves so as I understand it we don’t need stock cover but it sounds as if product liability insurance might be important for us. Would this be right do you think?
    I hope you can advise?
    Thanks,
    Amanda

    1. Andrew Minalto

      Hi Amanda,

      You would really need to consult with an insurance expert and probably even lawyer if you set-up a business like this.

      If it’s a Marketplace, you’ll need to create very detailed Terms & Conditions – sellers and buyers accept before joining which moves all liability from you to SELLERS.

      Again, you need professional advice on how to put this all together and comply with law.

      Andrew

  16. Hi Andrew,

    Brilliant article which has helped me quite a lot. I’m currently a business seller on eBay selling branded clothing, accessories, bags, jewellery etc for both adults and children. All my products are currently sourced from the UK however I sell a lot of samples which means some of the labels of the brand have been removed and there is also no care label stating fabric composition etc of the clothing. My question is do I need product liability insurance?

    I am also hoping to do some sample sales at different venues and have been asked by them if I have public liability insurance which I am aware I would need and am in the process of getting however would it also be in my interest to get product liability for the items I sell on-line on eBay or other on-line market places?

    Many thanks,
    Maria

    1. Andrew Minalto

      Hi Maria,

      It’s hard to tell for sure, I’m not an insurance expert, lol, just sharing what I know…

      I don’t think you really need product liability insurance for items like these but I’m not 100% sure, so can’t really give you any solid advice on this one.

      Andrew

  17. Hi Andrew,

    I am a larger Amazon and eBay seller and can recommend a good broker. Is it permissible for me to post his details below?

    Regards
    Julius

    1. Andrew Minalto

      Hi Julius,

      Sure, you can share his details, no worries.

      Andrew

  18. Hi Andrew,

    This is a really interesting article. Do you know where affiliates stand with product liability insurance? For example if someone wanted to create a site with products sold through the Amazon Associates program. Would they need liability insurance with them not manufacturing or actually being a retailer?

    Thanks,

    Simon

    1. Andrew Minalto

      Hi Simon,

      No, of course not – affiliates don’t need product liability insurance as it’s seller’s/importer’s responsibility, not affiliate’s.

      Thanks,
      Andrew

  19. Hi Andrew,

    Very useful article. I sell branded mobiles on Ebay, as a retailer buying of suppliers in EU. What sort of insurance should I have?

    Also, what insurance can cover me from (mostly false) claims of not receiving item, mobile damaged in shipping and mobile not working? Considering the box is sealed before shipment and not opened on my side.

    Thanks
    Adrian

    1. Andrew Minalto

      Hi Adrian,

      If you sell branded mobile phones purchased from genuine suppliers in EU, I don’t think you need product liability insurance at all.

      Not received item – tracked delivery gives you that and as for damage in shipping – most courier companies will have this by default or offer insurance at small extra cost.

      Thanks,
      Andrew

  20. Aly Cranston

    Hi Andrew

    I import craft supplies from the US, the kits come from a very large and reputable company and I am myself a LTD company. Would I need product insurance or would it go back on to the supplier. There are lots of other businesses using the same supplier that I do so i’m assuming they have managed to get product insurance for their imports?? please help as Im very confused.

    Thanks In Advance
    Aly

    1. Andrew Minalto

      Hi Aly,

      As that supplier is not based in the EU, yes, you need product liability insurance.

      Most insurance companies sell it in packages together with public liability insurance.

      Thanks,
      Andrew

  21. Hi Andrew,
    I have set up an online business to sell Rugs/carpets that I import from Asia. Would I need a product liability insurance?

    Could it happen that the customer slipped on the rug and asked for compensation?

    I do write to use anti slip rug pad in the product description but its not present on the product label.

    Thanks in Advance
    Manish

    1. Andrew Minalto

      Hi Manish,

      Im not 100% sure but I think yes, for products like these you will need product liability insurance.

      You will want to consult with an insurance broker to find out more.

      Thanks,
      Andrew

  22. Hi there,

    I make party decorations and party bag fillers/gift and filled party bags. What type of insurance to I need. I mostly sell face to face through word of mouth but also sell on eBay and etsy. It’s very complicated trying to find what type of Insurance is needed for this. I also hire out a bouncy castle (I already have insurance for this) and will also be hiring out a costume mascot – not sure what type of insurance I need for this also. Would that be public liability insurance?

    Really I’m trying to find out if I can get cover for most of this all in one!

    1. Andrew Minalto

      Hi Lara,

      You really need to contact insurance brokers to help you with various types of insurance you may need in your business. I’m not an insurance consultant so can’t give specific advice like this.

      Thanks,
      Andrew

  23. Gabriel Marks

    Hello,

    I am trying to start a business making tie-dye clothing and textiles and selling online from Etsy etc. I can’t get insurance (PLI) because I said I would sell to the USA. According to eBay the USA is the second biggest export market for UK based sellers. So why can’t I get insurance? I am trying to get onto New Enterprise Allowance which means I have to produce a business plan, and that plan has to include details of the insurance I will have and how much it will cost etc. All the brokers are telling me I can’t get insured. What can I do?
    If people in this country sell products produced here to the USA they must have product liability insurance. I can’t get PLI because I want to sell worldwide including the USA. People in this country do sell products to the USA. The logic is broken here. What am I missing?

    Thanks,

    Gabriel

    1. Andrew Minalto

      The logic is broken yes, Gabriel, but real life situation is what it is. Very rarely eBay sellers get insured, very rarely. 99.99% just don’t worry about it and probably are not even aware of such a thing.

    2. Hi Gabriel,

      I am having the same problem. I am looking to start an UK home based online website selling clothing in the next few weeks but I want to offer Worldwide Shipping.
      RBS have quoted me £503.50 to ship to Europe but to include shipping to the USA the yearly premium for home business cover would be over £1000.

      Did you manage to find a company that was willing to insure you? I would love to hear from you.

      Regards
      Karen

  24. Hi,

    I am an artist and thinking of doing pet portraits from photos supplied by customers, sold online but then posted to uk only. I am also thinking of doing animal art and doing sale or return in local shops. Then there is exhibition and galleries. What insurance do I need for mounted, unframed artwork on paper.

    s

    1. Andrew Minalto

      I’m not an expert on this topic but I don’t think you need any insurance at all.

      You can of course contact an insurance broker to double check this.

      Thanks,
      Andrew

  25. Hi there
    I am registered as a business on EBAY selling anything from LED lighting to wall art which i buy from high street shops. I do not directly import but a lot of the products i do buy from the high street are made in China. Do i need any type of insurance. I have contacted an insurance broker who states i don’t need any insurance? If a product was faulty i.e./Lights caused a fire, who would be responsible as i did not make them but sold them?
    Please advise
    Thanks

    1. Andrew Minalto

      Hi Pam,

      Importer is responsible. So if you do not import these goods on your own, you should’ worry about his.

      Thanks,
      Andrew

  26. Hi,

    I am in the process of setting up a toy website, all suppliers are within the eu and uk and its all branded products, what do you recommend,

    Thanks

    1. Andrew Minalto

      Hi Gemma,

      In that case I don’t think you need product insurance at all. I’m not an expert on this topic but that’s how I read the law/rules on this.

      Thanks,
      Andrew

  27. Hi Andrew,

    Great read.

    I Sell LED Lighting , some products i stock from other suppliers, some products are sent directly from the supplier, some of the supliers goods i stock also.

    Products are from Asia.

    Am i responsible for the stocked products that i purchased from my supplier, who imports from Asia?

    1. Andrew Minalto

      Hi Rhys,

      Yes, absolutely. As a seller to end customer, you’re responsible for products you sell.

      Thanks,
      Andrew

  28. Roger Francis

    Hi, I am having a major problem finding an insurance company that will offer me Product Liability on three accounts

    1. Can’t get liability cover for goods bought from China.

    2. Can’t get liability cover as I trade online and sell through Ebay.

    3. I work from home and conduct my business from a purpose built log cabin at the rear of my home.

    I sell health products such as Wheatgrass Powder and various herbal supplements.

    If Andrew or anyone could point me in the right direction I would be really grateful.

    I have spent hours phoning around and hitting a wall.

    Many Thanks

    Roger

    1. Andrew Minalto

      Hi Roger,

      Those are probably classed as “risky” products, hence you’re having hard time finding an insurer who could cover you. NOt sure what to recommend really, maybe someone working in similar niche could help you out more.

      You may want to post this on the UK Business Forums and ask for advice there.

      Sorry, not much of a help, I know.

      Andrew

  29. Hi Andrew

    I am in the process of setting up as a business seller on ebay and possibly other online places (e.g. Etsy), to sell my own handmade crocheted/craft items. This is on a very small scale. Should I be looking at product liability insurance? Any thing else I should be considering? What should I be looking for in a policy?

    Many thanks

    Jacqueline

    1. Andrew Minalto

      Hi Jacqueline,

      In your case I don’t think you need to worry about product insurance at all.

      Andrew

      1. Hypothetically, what if a baby choked to death on a piece of yarn or ball from one of the infant hats?

        1. Andrew Minalto

          That’s a good question Sharon!

          But I don’t have an answer for that….

          Andrew

  30. Hi Andrew,

    I am setting up a business in Ontario, Canada to sell new apparel online as well as to retailers who will then sell to the final customer in their stores. What insurance do I need for this? Public Liability Insurance?
    Product Liability Insurance? Stock Cover? Third Party Motor Insurance?

    I am thinking probably not the first two, but likely the last two, as we will carry some amount of stock (although mainly made up to order) and my business partner and I will be doing some driving to deliver and do sales calls to meet with potential retailers, etc.

    We would hope that our online sales and shipping will reach to the US and possibly internationally as well.

    Thanks for any guidance on this.

    Kerry

    1. Andrew Minalto

      Hi Kerry,

      Thanks for your comment.

      Unfortunately I can’t help you out with this one as I’m not really familiar with rules & laws for this in Canada.

      You probably want to check your local laws first or simply contact an insurance broker and ask them what type of insurance you’ll need for your new business.

      Sorry about that.

      Thanks,
      Andrew

  31. Hi Andrew, Thank you for writing this post it has been really helpful. I have a question I keep getting different answers. I am an artist and would like to sell prints online would I need to buy Public Liability insurance?

    1. Andrew Minalto

      Hi Sara,

      Thanks for your comment.

      No, I don’t think you need public liability insurance. I’m not 100% sure but it doesn’t make sense in your case.

      Thanks,
      Andrew

  32. Hi Andrew, I’d like to set up a business selling baby gifts in hampers. I’m planning on buying my products wholesale from UK or products I find on offer from high street stores. I’m hoping to sell online through selling sites but not sure what insurance I need? Would be grateful for any info. Thanks

    1. Andrew Minalto

      Hi Laura,

      Thanks for your comment.

      Technically, by law you would still need to get product liability insurance, which is often sold as a part of public liability insurance package for small businesses.

      Thanks,
      Andrew

  33. Hiya,

    many thanks for the informative post.
    can you please shed some light on what type of cover what i need if i setup a market place where the sellers post their products on to the system and customers buy them. The money will be paid directly to the seller via paypal or possibly to me and then i pass on to the seller..

    am i liable for the products they sell?

    thanks in advance

    1. Andrew Minalto

      Hi Tala,

      No, in this case you’re not liable as long as you state this clearly in your Terms & Conditions.

      eBay, Amazon, Etsy are same concept companies and they’re not liable for products people sell on their marketplaces.

      Thanks,
      Andrew

  34. Hi, Andrew. I am setting up a website selling snacks from other countries. If I buy the products from food import companies, do I still need liabilities insurance? Thanks

    1. Andrew Minalto

      Hi Shawn,

      Thanks for your comment.

      To be honest, I don’t know. You could try contacting some insurers and ask them about this – or even better – contact trading standards and ask them.

      Thanks,
      Andrew

  35. Ok thanks Andrew,

  36. Hi Andrew, I am set up as a business seller and i am currently selling my own used goods to try and get to TRS. Would i still need to get insurance if i am selling these goods, if they are branded electrical, gym equipment etc?

    1. Andrew Minalto

      Hi Nick,

      Technically by law you’re probably obligated to get insurance, yes.

      But I highly doubt many eBay sellers have it as most insurers won’t cover 2nd hand goods anyway.

      Andrew

  37. Thanks for the post Andrew, very useful.

    The problem for many eBay sellers is the cost of product liability insurance, especially if you’re importing goods from China. Many insurers will simply refuse to insure if you import from the far East – and if they do quote you, it’s likely to be thousands of pounds a year.

    If you’re a small eBay seller, this really can put insurance completely out of the picture.

    Charles

    1. Andrew Minalto

      Yes, I agree – for people starting just out the insurance cost can eat up all the potential profit & more..

      That’s why very few eBay sellers actually have PLI…

      Andrew

  38. i m doing a clothing shop for ladies and kids in ebay. What type of insurance you advice. We buy the product from uk whole sellers

    1. Andrew Minalto

      Hi Lola,

      In your situation I think you’re not required to have any insurance by law.

      But if you’re dealing with high stock levels, you should consider insuring your stock at least (so you’re secure in case of fire, flooding etc.)

      Thanks,
      Andrew

      1. Thanks for your kind advice

  39. Great post, very useful info, thanks Andrew.

    I had looked into insurance when I first started setting up as an online seller, but I was advised that public liability wasn’t needed because no one visit’s my premises (home) and that product liability wasn’t needed because retailers aren’t liable, the manufacturers/suppliers are.

    Having read your post, it appears that I was given misleading advice and I’ll have to get looking for good, affordable cover asap.

    Thanks again

    1. Andrew Minalto

      Hi Liam,

      Yes, exactly. If you import something un-branded from China, you’re actually legally responsible for the damage etc. such product can cause so especially with electronics, such product liability insurance is a must have.

      Andrew

  40. Thanks for the insightful post Andrew.

    I had put insurance to the back of my mind and completely forgotten about! I had also thought public liability would cover product, so it was very educational for me as well.

    1. Andrew Minalto

      You’re welcome Danny!

Leave a Reply