In short, no – Etsy does not require sellers to have insurance. However, having product liability insurance is highly recommended for anyone running an online shop of handmade goods.
If a customer alleges that a product purchased from your Etsy shop caused them harm or injury, product liability insurance can cover settlements, medical payments, and any other associated costs. It can save you huge sums of money should a claim be brought against you.
Etsy is simply a selling platform. Issues like this take both time and money to solve.
Types of Insurance for Sellers
There are several types of insurance that an Etsy seller should consider:
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General Liability insurance covers claims made by others for bodily injury, damage to property, or personal injury.
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Product Liability Insurance covers the legal costs associated with any claims of bodily injury or damage caused by your product.
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Business Property Insurance protects business property, including equipment and inventory.
Many new business owners erroneously assume their personal insurance policies will cover them if their business is sued or suffers a loss.
Etsy’s Policies and Seller Protection
Etsy offers tools and services for sellers, including a “Sellers Protection Policy.” However, Etsy does not provide product liability insurance.
Etsy’s Purchase Protection Program has restrictions. Orders over $250 USD aren’t covered.
Although the Seller Protection Policy assists with costs, Etsy emphasizes it is not an insurance policy. It is recommended for sellers to obtain insurance.
Conclusion and Recommendations
While insurance is not required for Etsy sellers, you must agree to rules and regulations before you can sell. All items must be handmade, vintage, or craft supplies.
Recommended policies for Etsy sellers include general liability insurance. As Etsy sellers may have studio visits or attend craft fairs, this policy can protect against potential injury lawsuits.
Product liability insurance demonstrates your dedication to your Etsy store and the items you sell. For crafters selling handmade goods, product liability insurance is vital. It provides coverage for any injuries or damages caused by your products and can protect you from costly lawsuits.