Insurance for a e-commerce / online retail: what you need + typical cost.

For your business: GL + Property bundle is cost-effective for e-commerce businesses with physical inventory.

What it covers in general: A Business Owners Policy bundles General Liability and Commercial Property into a single, discounted policy. Often includes business interruption insurance as well.

Typical annual cost: $750–$1,800 (median $990) · Insureon, Small Business Insurance Cost

For your business: Product liability (a buyer injured by your product) is covered under GL. Essential for physical product sellers.

What it covers in general: Covers claims of bodily injury or property damage that your business causes to others — a customer slipping in your shop, or a contractor accidentally breaking a client's window.

Typical annual cost: $500–$1,560 (median $540) · Insureon, General Liability Cost

For your business: If you sell digital products, courses, or software, E&O covers claims that your product failed to deliver.

What it covers in general: Covers claims that your professional advice, service, or work product caused a financial loss to a client — also called Errors & Omissions (E&O) or malpractice insurance.

Typical annual cost: $700–$1,500 (median $876) · Insureon, Professional Liability Cost

For your business: Required only if you have warehouse or fulfillment employees in most states.

What it covers in general: Pays for medical expenses and lost wages if an employee is injured or becomes ill because of their job. Also protects your business from employee lawsuits over workplace injuries.

Typical annual cost: $1,200–$8,000 (median $2,500) · Insureon, Workers Compensation Cost

For your business: If you hold physical inventory in a warehouse or home, property coverage protects that stock.

What it covers in general: Covers your physical business assets — building (if you own it), equipment, inventory, and furniture — against fire, theft, vandalism, and certain weather events.

Typical annual cost: $970–$1,570 (median $1,270) · Insureon, Commercial Property Cost

For your business: E-commerce sites process payment cards and store customer data. A breach is an existential risk for a small online retailer.

What it covers in general: Covers losses from data breaches, ransomware attacks, and cyber fraud — including notification costs, credit monitoring for affected customers, legal fees, and regulatory fines.

Typical annual cost: $1,440–$2,160 (median $1,800) · Insureon, Cyber Liability Cost

For your business: Not needed if you use third-party shipping. Required if you operate a delivery vehicle.

What it covers in general: Covers vehicles used for business purposes — work trucks, vans, cars driven to client sites — against accidents, liability, and damage. Personal auto policies specifically exclude commercial use.

Typical annual cost: $1,760–$2,940 (median $2,350) · Insureon, Commercial Auto Cost

For your business: Product liability claims can escalate; an umbrella adds protection for serious injury scenarios.

What it covers in general: Adds an extra layer of liability coverage above your GL, Professional Liability, and/or Auto limits. Pays claims that exceed your primary policy limits.

Typical annual cost: $750–$1,500 (median $1,030) · Insureon, Umbrella Liability Cost

If I dropship products, am I still liable when one injures a customer?

Yes, in most jurisdictions. The seller-of-record is in the chain of distribution and carries product liability regardless of whether you ever touched the product. Your contract with the manufacturer may include indemnification, but customers will sue you first because you're the one they paid. Maintain product liability coverage even as a dropshipper.

Does my e-commerce platform (Shopify, BigCommerce) cover me for cyber?

Their platform covers their infrastructure, not your business. If their platform is breached and your customer data leaks, you're still on the hook for notification costs and reputation damage. Independent cyber coverage (the 'first-party' kind that pays your costs, not just third-party liability) is standard for any e-commerce business handling card data.

Do I need workers comp if I'm the only person and I pack everything from my garage?

No — workers comp is for W-2 employees, and you're not your own employee. But check your homeowner's policy: business activities at home are typically excluded, so any inventory damage, theft, or fire at your home-based fulfillment center may not be covered without a 'home-based business' endorsement.