Etsy Entrepreneur Business Insurance
Getting insurance for your Etsy entrepreneur business is essential.
Etsy entrepreneur businesses need financial protection from claims for breach of contract, trademark infringement, and any number of other risks.
For example, someone could claim that your enterprise breached a supply contract or that its logo is too similar to their company’s logo.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for an Etsy Business
General liability insurance is — generally speaking — one of the most important insurance policies for Etsy entrepreneur businesses.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
In addition to general liability insurance, your Etsy entrepreneur business should probably have other types of insurance, such as:
- Workers’ compensation insurance
- Business income insurance
- Data breach insurance
- Commercial umbrella insurance
Generally speaking, companies that offer business insurance can be classified as either traditional providers or online providers.
- Traditional providers — This type of provider is familiar to most people and includes well-known companies like Allstate and The Hartford. A traditional insurer offers high-quality coverage and is a safe bet. However, an equivalent policy from an online insurer will probably cost less.
- Online providers — Unlike traditional insurers, online insurers don’t maintain physical offices where agents sell insurance. Instead, they sell policies on their websites using AI to customize coverage. They’re cheaper and faster, and we recommend them for most small businesses.
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Cost of General Liability Insurance
On average, Etsy entrepreneurs in America spend between $400 - $1500 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for an Etsy business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for an Etsy Business
Example 1: While visiting your workshop, a potential investor in your art business falls, breaks an arm, and decides to sue. General liability insurance would pay for an attorney to defend your business and any required settlement.
Example 2: As you transport a sculpture to a customer’s car, you lose control of the dolly and it slams into the car. General liability insurance would cover the customer’s vehicle repair costs.
Example 3: Another Etsy seller sues your business for libel. While you’re uncertain why this seller thinks you libeled him, you want to hire a lawyer immediately to protect your interests. General liability insurance would pay for your legal fees.
Other Types of Coverage Etsy Entrepreneur Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Product Liability Insurance
While you put your best effort into the products you sell on Etsy, there’s always a chance someone might claim your product caused them harm. In the event of a lawsuit, product liability insurance would cover your legal fees and any required settlement.
Commercial Property Insurance
You made a major investment in the supplies and equipment you use to make your products. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes your business equipment, supplies, and product inventory.
Home-Based Business Insurance
If you run your business from your home, you may need this insurance to safeguard your equipment and space in your home devoted to your business. A typical homeowners insurance policy may not cover business-related items or customer injuries in your workshop if you don’t disclose you use your home for business purposes.
Commercial Umbrella Insurance
While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your Etsy business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Etsy Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
You should purchase business insurance for your Etsy entrepreneur business before accepting any business. If you don’t, the company’s long-term financial health will be at risk because you won’t be protected from lawsuits and other potential financial liabilities.
Local laws also may require various types of business insurance, such as workers’ compensation for companies with employees.
Not necessarily. Certain exceptions may be written directly into your Etsy business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.