Etsy Shop insurance – what kind and at what cost

Whenever you budget the expenses of your business, Etsy Shop insurance must be included in the list because you can’t always know exactly what is going to happen in the future.

With the protection provided by general insurance and all the other kinds of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your Etsy Shop enterprise, you must consider how much financial liability you are taking on.

If your Etsy Shop business runs without proper insurance, you are taking a tremendous chance not just of losing some money but of a complete wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the upshots of their actions.

In this article, we are giving very general guidelines for growing businesses to highlight what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Etsy Shop business?

What this means, for any Etsy Shop business owner, is that if some person claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Etsy Shop business is not sheltered by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Montana, there are specific monetary levels that limit the amount a court can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have claimed.

When you are running your Etsy Shop operations, you can’t deny responsibility for the results of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as an LLC, all of that liability belongs to you as a person.

What does Etsy Shop insurance protect you from?

For your Etsy Shop business, the most important kinds of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some mandatory kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any Etsy Shop business owner should remember when negotiating the insurance needed.

The main headings of insurance for your Etsy Shop businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability for your Etsy Shop operations

Any Etsy Shop business is dealing directly with customers, and that means you always have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can sue you for compensation.

General liability insurance policy for your Etsy Shop business insures you against claims coming from injury to customers or damage to their property.

It protects your Etsy Shop business from the claims themselves and in addition to any resulting court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts demand proper liability insurance.

The normal level of general liability insurance for your Etsy Shop business would be with a cap of $1 million for a single event and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Etsy Shop insurance operations.

Professional liability insurance for your Etsy Shop business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Etsy Shop business for them, you can quickly have to fight a law suit.

Even if the lawsuit against you is judged in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Almost all small Etsy Shop business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of Etsy Shop insurance section below for average prices of professional liability insurance for your Etsy Shop operations.

Product liability insurance for your Etsy Shop business

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that the results didn’t meet your description of function, or that your advice was basically incorrect.

You need to know the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for results caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Etsy Shop

Only you can estimate exactly how much insurance you need.

Best advice is to contact experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your Etsy Shop business

Be careful! – almost all policies for private vehicle insurance do not cover any event like theft or accidental damage when the vehicle is being used for business purposes.

The best way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial van policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is covered if your truck is involved in a collision.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The necessary value of the insurance depends on the depreciated value of the vehicle, and your intended level of cover of contents.

Tools and Equipment insurance for your Etsy Shop business

Since your Etsy Shop business needs specific and costly equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can wipe-out your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy everything needed to keep your Etsy Shop business running.

It is impossible to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Etsy Shop business’ equipment.

Commercial Property insurance for your Etsy Shop operations

Any Etsy Shop business that owns or rents space in a building must have a commercial property insurance policy.

If you own the space, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Your physical building location should carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your Etsy Shop business deals in areas of high risk, like California or Georgia, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where unlimited cold snaps can cause damage to outer coverings of Etsy Shop business premises, there is a need for more extra cover than in warmer climes.

Whereas the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Etsy Shop insurance section below to give some indication of the average prices per million dollars of property insurance for your Etsy Shop business.

Temporary insurance by month, week or day for your Etsy Shop business

Is your Etsy Shop business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Etsy Shop – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having the same risk cover.

The key feature of short-term insurance is that you pay for the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of better business activity, get the existing cover improved.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Etsy Shop business

You have the chance to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.

BOP insurance will protect you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized Etsy Shop businesses, such as yours.

There are a few limits that will rule whether BOP is suitable for your own business.

BOPs do not cover your professional liability or commercial vehicle risks.

Also, the size of your business will rule whether you are allowed to take out BOP cover.

The normal business that is eligible for a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual revenue.

Plus, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Etsy Shop business employees

In many states, it is mandatory to have workers compensation insurance when your Etsy Shop business has one or more employees.

Workers compensation insurance covers the enterprise against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only permit coverage from the government-run monopoly state funds.

In these states, you cannot take out your workers compensation obligations from private insurance companies.

Workers compensation charges are worked out based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance for your Etsy Shop business

Although every Etsy Shop insurance need is unique, there are enough examples of average quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your Etsy Shop businesses needs.

Cost of insurance for your Etsy Shop operations depends on many different factors.

We have reckoned these figures for small freelance Etsy Shop businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Oregon, they can be about 20%-30% lower.

The location and size and type of your Etsy Shop business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your suburb.

FAQ

What is small business insurance for Etsy Shop operations?

This is a general term used to describe standard insurance policies designed to protect Etsy Shop business owners from risks like bodily injury, property damage, claims of negligence.

Does my Etsy Shop business have to have insurance?

Some of the forms of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Etsy Shop business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Etsy Shop insurance.

How much will Etsy Shop business insurance cost?

As well as the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

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