Ecommerce Businesses Insurance
Protect your online business from product claims, data breaches and delivery disputes with cover built for digital retail.
Get in touchWhat is ecommerce businesses insurance?
Ecommerce Businesses insurance is a specialist policy designed to protect retail businesses from the risks of selling products, managing premises and employing staff. It typically includes public liability, employers liability, stock cover and buildings and contents insurance.
Running a retail business involves risks from customer injuries and product claims to theft and property damage. The right insurance protects you against claims that could otherwise threaten your business.
Find insurers who understand retail and ecommerce businesses, so your cover reflects the products you sell and the channels you trade through.
Public Liability
Covers claims for injury or damage caused by products you sell online.
Products Liability
Covers claims from products you source and sell through your online store.
Cyber Liability
Covers data breaches involving customer payment and personal information.
Employers Liability
Required by law if you employ anyone, covering employee injury or illness claims.
Who needs ecommerce businesses insurance?
Online-only retailers
Selling products exclusively through a website
Marketplace sellers
Trading on Amazon, eBay or Etsy
Dropshippers
Selling products that ship directly from suppliers
Subscription box businesses
Curating and selling subscription product boxes
Regulatory and compliance requirements for ecommerce businesses
Ecommerce businesses must comply with the Consumer Rights Act 2015, the Distance Selling Regulations, and platform-specific seller agreements. Customer claims for faulty products, delivery failures, or misrepresentation must be defended, and products liability insurance covers claims arising from product defects.
If you sell on Amazon, eBay, Etsy, or Shopify, check your seller agreement for insurance requirements. Most major platforms require sellers to carry public liability and products liability cover. Amazon Seller Central, for example, may restrict your account if claims are made against you without evidence of insurance.
Data protection compliance (UK GDPR) is essential but separate from insurance. However, some policies include data breach liability cover. If you store customer payment or personal data, consider cyber liability or professional indemnity insurance that covers data security breaches.
If you import goods from overseas, you are responsible for ensuring products meet UK safety standards (Consumer Protection from Unfair Trading Regulations, product safety directives). This liability sits with the importer, so products liability cover is critical for imported goods.
How much does ecommerce businesses insurance cost?
£400–£1,200 annually for an ecommerce business with turnover under £500k and no physical premises
Real claims: what ecommerce businesses insurance covers
A customer buys a faulty electronic device that causes a minor electrical fire in their home; they claim £6,500 for damage and injury
Products liability cover paid the claim, replacement goods, and legal defence
£6,500
A fulfillment error results in the wrong item shipped to multiple customers; combined claims for refunds and compensation total £4,200
The policy covered the settlement (commercial error is typically excluded, but some policies cover contractual liability)
£4,200 (subject to policy terms)
A customer receives a product with defective packaging that leaks and damages their property; they claim £9,000 compensation
Products liability policy covered the full claim including legal costs
£9,000
WHY CECIL
Built differently.
Cover for ecommerce businesses risks
Ecommerce Businesses face specific risks from product claims to customer injuries. Cecil finds insurers who understand your retail sector and cover these risks properly.
Stock and premises protected
Your stock and premises are your primary assets. Cecil ensures your policy covers the full value of your inventory and business property.
Products liability included
If a product you sell causes injury or damage, products liability covers the claim. Cecil makes sure this is part of your retail insurance package.
Competitive quotes for retailers
Get options from specialist insurers to find retail insurance from specialist providers. Cover that reflects the specific risks of your business, not a generic commercial policy.
Common questions about ecommerce businesses insurance
Do ecommerce businesses need public liability insurance?
Yes, public liability is essential for ecommerce businesses selling physical products. Although you have no physical shop premises, you remain liable under the Consumer Rights Act 2015 for injury or damage caused by products you sell. If a customer is harmed by a faulty item they purchased from your website, they can pursue a claim against you. Products liability—not traditional public liability—is your primary protection here. Many online marketplaces (Amazon, eBay, Etsy) require proof of at least £1m–£2m of products liability cover before they allow high-value sales. Speak to an FCA-authorised broker about public liability and products liability cover tailored for online retailers.
Does ecommerce businesses insurance cover stock theft?
Yes, if you store inventory in a warehouse or premises, buildings and contents insurance covers stock theft and damage, subject to security requirements. However, most pure ecommerce businesses don't hold significant physical stock (especially dropshippers). If you do hold inventory, the insurer will require security measures such as CCTV, secure locks, and limited staff access to high-value items. The cover applies to goods stolen during operating hours or after hours if security standards are met. You must insure stock at replacement cost. When getting quotes, describe your actual storage location (home, shared warehouse, dedicated unit), security measures, and current stock values. Your chosen insurer will advise on the appropriate level of cover.
Do ecommerce businesses need products liability insurance?
Yes, products liability is essential for any ecommerce business selling physical goods. You are legally liable under the Consumer Protection Act 1987 for any injury or damage caused by a faulty product you sell, regardless of whether you manufactured it. If you source from suppliers, import goods, or resell items, you remain liable to the end consumer. For example, if a customer receives a faulty electronic item that causes a fire in their home, they can claim against you. Products liability covers these claims, legal defence costs, and settlements. This applies whether you sell on your own website or through marketplaces. Make sure your insurer knows what you sell and where you source products.
What level of public liability do ecommerce businesses need?
Most ecommerce platforms require between £1m and £5m of products liability cover (not traditional public liability, as you have no physical premises). The appropriate level depends on your product risk profile and annual sales. A low-risk seller (books, stationery) might suit £1m cover; a higher-risk seller (electronics, power tools) should consider £2m–£5m. Amazon may require proof of cover for certain product categories (beauty, supplements, electronics). Most online marketplaces specify minimum cover amounts in their seller agreements. When getting quotes, declare your product categories and annual turnover. Your chosen insurer and the marketplace platforms will advise on the appropriate cover level for your business.
Does ecommerce businesses insurance cover online sales?
Yes, products liability covers your products wherever they are sold online. If you sell through multiple platforms (your website, Amazon, eBay, Etsy), your policy must cover all channels. Different platforms have different insurance requirements: Amazon may require higher cover than smaller marketplaces. Some insurers offer platform-specific policies; others provide umbrella cover for all channels. The key is declaring all sales channels and platforms when you get a quote. If you sell the same products through multiple marketplaces, your insurer needs to know the total annual value across all channels. Speak to your chosen insurer about how they handle multi-channel sales and whether your products liability cover extends to all platforms you use.
Do ecommerce businesses need insurance if they only sell online?
Yes, even pure ecommerce businesses with no physical premises need products liability insurance. You remain legally liable under UK law for any injury or damage caused by a faulty product you sell, regardless of whether you have a shop or office. Many people mistakenly think that selling only online means less liability—it doesn't. Your exposure is to every customer across the UK (and internationally if you ship abroad). Products liability covers these claims, settlements, and legal defence costs. Without this cover, a serious product defect claim could bankrupt your business. Speak to an FCA-authorised broker about products liability tailored for pure ecommerce sellers. Most online-only businesses find it affordable and essential.
What insurance do I need if I sell on Amazon or eBay?
Most major online marketplaces require proof of products liability insurance before allowing you to sell high-value items or certain categories. Amazon typically requires £1m–£2m of cover; eBay requires proof of insurance for some categories. Your policy must explicitly state coverage for your product categories and online sales. Some marketplaces have partner insurance schemes; others require you to arrange independent cover. When you apply for a seller account, the platform will specify its insurance requirements in the seller agreement. It's best to arrange cover before you start selling. Speak to an FCA-authorised broker and provide the marketplace's requirements; your chosen insurer can confirm whether your policy meets them. Keep proof of insurance on file to share with the platform.
Is ecommerce insurance more expensive than retail?
Ecommerce insurance is often cheaper than high street retail because you have no premises costs, no foot traffic-related injury risks, and lower exposure to direct customer interaction. However, products liability premiums may be higher if you sell high-risk products (electronics, power tools, beauty items) or import goods from overseas. Premiums also depend on your annual turnover, number of orders, and geographic reach. A low-risk ecommerce seller (books, crafts) might pay £300–£600 annually; a higher-risk seller (electronics, imported goods) might pay £800–£1,500. Dropshippers often find insurance cheaper than merchants holding significant inventory. When comparing quotes, ensure policies offer the same level of cover and product categories. Your chosen insurer will explain how risk factors affect your premium.
Does ecommerce insurance cover cyber attacks or data breaches?
Standard ecommerce insurance does not automatically include cyber liability or data breach cover. If you store customer payment card data, personal information, or business records, cyber liability is critical. A data breach could result in regulatory fines (under UK GDPR), notification costs, customer claims, and business interruption. Cyber liability covers notification costs, forensic investigation, regulatory fines, and customer liability. This is a separate add-on to your products liability policy. If you process online payments, store customer names, addresses, or emails, or operate through major marketplaces that share your customer data, cyber cover is essential. Speak to your chosen insurer about cyber liability or data breach cover. UK GDPR compliance is separate but complementary to cyber insurance.
What happens if a customer receives a damaged or faulty product?
Your products liability insurance covers claims if a faulty product causes injury or property damage to the customer. For example, if a customer receives a damaged electrical item that causes a fire in their home, products liability covers the settlement and legal defence costs. However, refunds and replacement goods are typically your commercial responsibility, not an insurance matter. Consumer Rights Act 2015 requires you to refund customers for faulty goods within a reasonable timeframe. Products liability covers the customer's damages claim (medical costs, property damage) arising from the product fault, not the cost of your replacement or refund. When you make a claim, provide documentation of the fault, customer communication, and any expert assessment. Your chosen insurer will guide you through the claims process.
Interested in Ecommerce Businesses insurance?
We will be in contact when Cecil launches.