Running an online store means dealing with defective products, hackers, shipping issues and data breaches. This table breaks down the business insurance types you need and the coverage amounts that protect your operations.
What Insurance Do You Need for an E-commerce Business?
E-commerce businesses typically require product liability, general liability, workers' compensation and cyber liability insurance.
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Updated: December 29, 2025
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E-commerce Business Insurance Requirements: Key Takeaways
Product liability insurance is the most critical coverage for e-commerce businesses due to high exposure from defective products, with sellers held liable even when sourcing from third-party manufacturers. (Read More)
E-commerce businesses commonly require general liability, workers' compensation and commercial auto insurance mandated by state law or marketplace platforms like Amazon and Walmart. (Read More)
Optional coverage e-commerce businesses should consider includes cyber liability, commercial property and business interruption insurance.
To ensure compliance, request your certificate of insurance, verify coverage meets platform requirements, upload proof to seller portals and set renewal reminders. (Read More)
What Insurance Types Are Needed for an E-commerce Business?
Covers claims from customers injured or harmed by products you sell online, whether you manufacture them or resell items from suppliers. Online retailers can be held liable even for defective products from third-party manufacturers. | $1 million to $2 million per occurrence for businesses selling physical products online. | Supplements from an online wellness shop caused allergic reactions in 12 customers. Emergency room costs reached $89,000, and three customers sued for severe reactions and ongoing health issues. Product liability insurance covered the $78,000 defense costs and $215,000 settlement, protecting the owner from the full $382,000 out-of-pocket expense. | |
Protects your online store from costs related to data breaches, ransomware attacks, payment system hacks and stolen customer information. Coverage includes customer notifications, forensic investigations, legal fees and regulatory fines. | $1 million to $2 million for businesses storing customer credit card data, as a single breach can cost $50,000 to $500,000+. | Hackers stole credit card information from 3,400 customers at an online clothing boutique. The breach cost $67,000 for forensic investigation and repairs, $31,000 for customer notifications and credit monitoring, $23,000 in legal fees, $18,000 in lost sales during the five-day shutdown and $28,000 in PCI DSS fines. Cyber liability insurance covered all $167,000, preventing the business from closing. | |
Covers third-party claims for bodily injury and property damage at your warehouse, fulfillment center or office, plus advertising injury claims like copyright infringement. Protects against visitor injuries and operational accidents at your business location. | $1 million per occurrence and $2 million aggregate for online retailers with physical business locations. | A vendor slipped on a wet floor at an e-commerce warehouse, fracturing her hip and requiring surgery. Medical bills totaled $67,000, she missed 12 weeks of work costing $18,000 in lost income and sued for $95,000 in pain and suffering. General liability insurance covered the $67,000 in medical costs, $95,000 settlement and $28,000 in legal fees—$190,000 total. | |
Required by law in most states once you hire your first employee. Covers medical costs and lost wages for warehouse injuries like back strains from lifting inventory, repetitive stress injuries from packing and forklift accidents. | Coverage amounts are set by your state's workers' compensation board, with premiums based on payroll and job classifications. | A warehouse employee injured her back lifting a 60-pound box from an upper shelf. The injury required emergency surgery costing $52,000, six months of physical therapy at $8,900, 14 weeks off work with $16,800 in lost wages and $4,200 in vocational retraining. Workers' compensation covered all $81,900, protecting the employee's recovery and the business from a lawsuit. | |
Covers your inventory, computers, packaging supplies, office equipment and warehouse contents against fire, theft and property damage. Reimburses replacement value so you can restock and resume operations after covered losses. | $50,000 to $500,000 based on full replacement value of your inventory and equipment. | A warehouse fire destroyed an e-commerce furniture retailer's entire inventory of $287,000, plus $43,000 in computers and office equipment, $12,000 in packaging materials and $8,500 in warehouse shelving. Commercial property insurance reimbursed the full $350,500 within 18 days, allowing the owner to restock and resume operations instead of closing permanently. | |
Covers lost income and ongoing expenses when your e-commerce operations shut down due to fires, equipment failure or cyber incidents. Pays for lost sales and fixed costs like rent and salaries during downtime. | Six to 12 months of gross profit, typically $50,000 to $500,000 based on monthly revenue. | A server failure crashed an online electronics store's website for 19 days during the holiday shopping season. The outage cost $127,000 in lost sales, $18,000 in ongoing expenses like warehouse rent and employee salaries and $9,400 for emergency IT services. Business interruption insurance covered all $154,400, ensuring the business survived its most profitable season. | |
E-commerce Business Insurance Requirements
Insurance requirements for online sellers come from three places: state laws, marketplace rules and contracts. Amazon and Walmart each have sales thresholds that trigger insurance requirements, plus you'll need workers' compensation in most states if you hire anyone.
General Liability Insurance (Including Product Liability) | Amazon requires coverage within 30 days of reaching $10,000 in monthly sales, while Walmart mandates it at $100,000 in annual gross merchandise value, with both platforms requiring the marketplace be named as additional insured. This policy covers operational risks like customer injuries at warehouses and advertising claims, plus product-related claims from defects causing injury or property damage. | Amazon requires $1 million per occurrence, $1 million products/completed operations aggregate and $1 million general aggregate. Walmart requires $1 million per occurrence and $2 million aggregate, with high-risk products potentially requiring $2 million to $5 million. |
Workers' Compensation Insurance | Required by law in all states except Texas once you hire your first employee, with penalties up to $10,000 per employee and business license suspension for non-compliance. Required for e-commerce businesses with warehouse staff, fulfillment teams or customer service employees. | Minimum coverage amounts are set by each state's workers' compensation board. Premiums are calculated based on payroll and job classifications, with warehouse roles rated higher than office positions. |
Required by law in 49 states for business-owned vehicles used for deliveries or inventory transport, as personal auto policies don't cover business use. Non-compliance results in fines, license suspension and personal liability for accidents. | State minimums vary from 25/50/10 to 30/60/25 split liability limits. Most e-commerce businesses should carry $1 million combined single limit with comprehensive and collision coverage. | |
Cyber Liability Insurance | Payment Card Industry compliance and major platforms increasingly require coverage for businesses processing payments or storing customer data. Merchant accounts may be terminated after data breaches without adequate insurance. | Platforms require minimum coverage of $1 million. Businesses processing $5 million+ annually need $2 million to $5 million based on revenue and customer records stored. |
Commercial Property Insurance | Landlords require proof of coverage naming them as loss payee before signing warehouse or fulfillment space leases. Lenders also mandate coverage for financed properties, as landlord insurance doesn't cover tenant inventory or equipment. | Coverage amounts are based on full replacement cost of inventory and equipment, typically $50,000 to $500,000. High-volume operations may need $500,000 to $2 million to satisfy lease requirements. |
How to Ensure E-commerce Business Insurance Requirements Are Met
Follow these steps to maintain compliance with marketplace platform requirements, state laws and commercial contracts after purchasing your e-commerce insurance. This guide covers proving coverage and keeping it current for platforms like Amazon and Walmart, payment processors and business operations.
- 1Request your Certificate of Insurance (COI) from your insurer
Contact your insurance provider immediately after purchasing coverage to request a certificate of insurance, which most insurers deliver via email within minutes to 24 hours. Your COI serves as proof of coverage for marketplace platforms, payment processors, landlords and any other parties requiring insurance verification.
- 2Verify your COI meets all platform requirements
Review your certificate of insurance to confirm coverage limits match requirements ($1 million per occurrence for Amazon, $1 million/$2 million for Walmart) and your business name appears exactly as shown on your seller accounts. Check that required parties like "Amazon.com, Inc., and its affiliates and assignees" or "Walmart Inc., its subsidiaries and its affiliates" are listed as additional insureds, requesting an updated certificate from your insurer if anything is incorrect or missing.
- 3Upload proof of insurance to marketplace seller portals
Submit your certificate of insurance through Amazon Seller Central's Business Insurance page or Walmart Seller Center's insurance section within 30 days of reaching sales thresholds to avoid account suspension. Navigate to the business insurance or insurance compliance section of each platform where you sell and follow the upload instructions to attach your COI file.
- 4Provide COIs to payment processors, landlords and partners
You'll need to share your certificate of insurance with payment processors like Stripe or PayPal if they request it, plus any landlord before signing a warehouse lease. Most 3PLs and wholesale distributors ask for proof of coverage before handling your products.
- 5Set renewal reminders and proactively update coverage
Create calendar alerts 60 days before your policy expiration date to purchase renewed coverage and obtain updated certificates of insurance from your insurer. Upload new COIs to all marketplace portals, payment processor accounts and landlord contacts immediately after renewal to prevent service interruptions, account holds or lease violations during critical sales periods.
Get Business Insurance You Need for Your E-commerce Business
You can get matched to e-commerce business insurance providers using our tool below. Compare quotes from multiple insurers, research costs based on your product categories and sales volume, and evaluate providers specializing in online retail to find your best fit.
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About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.