A single unexpected claim can drain months of hard-earned profits overnight—ask any small store owner. That’s where smart planning comes in. With the right ecommerce business insurance, you don’t have to lose sleep over damaged packages, customer lawsuits, or data breaches. This guide breaks down what it covers, why you need it, and how to pick the best plan for your store’s future success.
What is ecommerce business insurance?
Ecommerce business insurance protects online sellers against risks like customer lawsuits, data breaches, damaged inventory, or shipping issues. Its coverage keeps your online store compliant with platforms or suppliers, and helps your business recover quickly when unexpected problems hit.
It works like a safety net: you pay a monthly or annual premium, and if something goes wrong—say, a customer sues over a faulty product or a hacker steals payment info—your policy helps cover legal fees, settlements, or losses.
Do ecommerce businesses need insurance and why?
Ecommerce businesses absolutely need insurance because their virtual storefronts don't eliminate real-world risks; in fact, they introduce new ones. While operating online, they face unique digital vulnerabilities like cyberattacks and data breaches, alongside physical risks such as product liability, inventory damage, and shipping issues.
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For instance, 43% of all cyberattacks are aimed at small businesses directly, with the average cost of a small business data breach in 2025 estimated at $120,000 to $1.24 million.
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Furthermore, physical goods face perils: nearly half (45%) of Americans report having a package stolen, contributing to an estimated $12 billion in porch package thefts, and 58 million Americans have become victims in 2024.
Without comprehensive small business ecommerce insurance, companies risk significant out-of-pocket expenses, legal battles, and even closure, as 60% of small businesses reportedly go out of business within six months of a cyberattack. Insurance provides a vital financial safety net, ensuring continuity and peace of mind.
7 Top ecommerce business insurance vendors
Since you know the extensive losses a single mishap can cause, it’s wise to pick a trusted insurer. Below are seven top insurance providers, featuring specialized insurance and services, worth considering for reliable protection.
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Vendors
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AM Best Rating
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Best For
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Support Country
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Seel
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No direct rating due to its niche in package insurance
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All ecommerce businesses
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The U.S., Canada, New Zealand, Australia, the U.K., France, Germany, and the Netherlands
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CNA
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A (Excellent)
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Medium to large online ecommerce businesses with complex or international operations
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The U.S. , Canada, and Europe
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Farmers
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B++ (Good)
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Established online stores that value personalized guidance and in-depth risk assessment
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The U.S. and territories (within 25 miles of the U.S.-Mexico border), Puerto Rico, and Canada
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The Hartford
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A+ (Superior)
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Amazon, Etsy, Walmart, and ecommerce sellers
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Nationwide and international coverage for the U.S. companies
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Westfield
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A (Excellent)
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Established ecommerce stores
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The U.S., the U.K., and Dubai
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Simply Business
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A++ (Superior)
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Amazon, Etsy, Walmart, and ecommerce sellers
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The U.S. and the U.K.
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NEXT Insurance
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A- (Excellent)
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Small businesses
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The U.S., Puerto Rico, and Canada (international coverage requires consultation)
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Seel
Seel is a specialized ecommerce insurance platform, recognized as a leading solution for commerce, trusted by over 2,000 merchants. Its distinctive, consumer-facing Worry-Free Purchase, an ecommerce shipping insurance, integrates directly into the checkout process. It simplifies operations by offering protection against lost, damaged, or delayed packages. Seel aims to significantly increase conversion rates and build customer trust by providing guaranteed estimated arrival times and facilitating free returns.
Special Insurances and Services:
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Lost Packages: Covers items marked "delivered" but not received, stolen packages, or shipments not received after 30 days (US: 10 days) following order fulfillment. Specific supporting documents like police reports or security footage may be required for claims, though the first occurrence might be compensated without proof.
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Damaged Products: Covers items rendered unusable (e.g., clearly fractured, shattered, bent, crushed) during transit. Payouts are determined by evaluation results, up to 100% of the purchased value, depending on how the damage affects usability. Damage to packaging without affecting the item, or clear pre-shipment defects, is not covered.
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Delayed Shipments: Covers orders not delivered after specific timeframes following order fulfillment (US: 10 days; outside US: 30 days).
CNA
CNA is a well-established, A-rated commercial insurance carrier with over 125 years of experience, serving businesses and professionals globally. As the country's eighth-largest commercial insurance writer, CNA offers adaptable and specialized solutions, leveraging deep international expertise and a local presence to meet diverse business needs, including those of small businesses.
Special Insurances and Services:
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Sole Proprietor & Ghost Workers' Comp: A distinctive offering for business owners who are their own primary workforce, providing workers' compensation benefits if they are injured or sick on the job.
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Broad Commercial Portfolio with Global Reach: While not a single "ecommerce" product, CNA's strength lies in its extensive range of commercial products (casualty, marine, umbrella & excess casualty, warranty & alternative risks), coupled with deep international expertise. It allows for highly customized and complex risk solutions for ecommerce businesses with diverse or global operations.
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Comprehensive Business Owner's Policy (BOP): CNA's BOP is designed to protect businesses from a range of common risks by packaging important coverages like general liability, commercial property, and business interruption into a single policy, simplifying management for ecommerce businesses.
Farmers
Farmers has a 90-year history of prioritizing customers, offering customizable business insurance solutions. A unique strength of Farmers lies in its agents, who are often small business owners themselves, providing a relatable understanding of entrepreneurial challenges and offering personalized advice to help manage commercial liability risks.5 This approach aims to deliver tailored support to businesses.
Special Insurances and Services:
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Agent-Driven Personalized Advice: Farmers' unique strength is its network of agents who are often small business owners themselves, providing a relatable understanding of entrepreneurial challenges and offering personalized advice to help manage commercial liability risks.
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Employment Practices Liability (EPL): Helps cover the business entity, directors, and employees against legal actions by disgruntled former employees or job applicants, including accusations of wrongful termination, harassment, or discrimination.
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Cyber Liability and Data Breach with Forensic Assistance: Beyond just financial protection, Farmers offers legal and forensic assistance to attempt to recover stolen confidential business and customer data after a system hack, along with ongoing data security consultation.
The Hartford
With over 200 years of experience, The Hartford is a seasoned insurance company dedicated to helping small business owners. They offer tailored insurance solutions, explicitly highlighting coverage for online retailers operating on major platforms like Shopify, Amazon, Etsy, and Walmart, protecting them against a wide array of liability claims and technology-related risks.
Special Insurances and Services:
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Tailored Solutions: The Hartford explicitly highlights coverage tailored for online retailers operating on major platforms such as Shopify, Amazon, Etsy, and Walmart. It helps popular ecommerce ecosystems to simplify meeting platform-specific insurance requirements.
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Reputational Harm Coverage: Their general liability coverage extends to protect against claims of reputational harm, including malicious prosecution, slander, libel, wrongful eviction, and privacy violations.
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Shipping Insurance: An optional, yet highly relevant, coverage that helps protect items sent to customers while they are in transit. This directly addresses a common pain point for ecommerce businesses.
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Hired and Non-Owned Auto Coverage: Specifically helps cover vehicles used for business purposes that are rented, leased, or borrowed, addressing liabilities not covered by personal auto policies.
Westfield
Westfield offers comprehensive commercial insurance solutions designed to safeguard businesses of all sizes with customized coverage. With an "A" (Excellent) rating from AM Best since 1934, Westfield emphasizes financial strength and industry experience, providing flexible business insurance products to reduce out-of-pocket payments for costly property damages and legal settlements.
Special Insurances and Services:
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"Pay As You Go" Workers' Compensation: A flexible payment option for workers' compensation that eliminates large down payments, improves cash flow by spreading payments across payroll cycles, and provides more accurate billing based on real-time payroll data.
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Premium Audit for Accurate Billing: Conducts periodic premium audits to ensure businesses only pay for the coverage they need as their needs evolve, preventing overpayment or underinsurance.
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Proactive Risk Control Services: Beyond just providing policies, Westfield offers industry-specific risk management services and resources to help businesses create safe workplaces and minimize losses.
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Westfield Specialty for Complex Risks: A dedicated team with extensive expertise in the international specialty market, capable of tackling complex coverages such as management liability and excess and surplus (E&S) property.
Simply Business
Simply Business operates as an online insurance marketplace, insuring over 1 million small business owners worldwide. It specializes in providing customized coverage options and quotes from top-rated small business insurers, aiming to simplify the process of obtaining ecommerce business insurance in as little as 10 minutes.
Special Insurances and Services:
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Inland Marine Insurance for Mobile Inventory: It explicitly highlights to financially protect equipment and inventory while in transport or stored offsite, covering repair or replacement costs for stolen or damaged items, including laptops or mobile devices used for work travel.
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Online Marketplace for Comparison: Functions as an online marketplace allowing businesses to compare customized quotes from a panel of top-rated national insurers, fostering choice and affordability.
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Rapid Online Quoting & 24/7 Policy Management: Offers the ability to get a quote in as little as 10 minutes and provides 24/7 online access to manage policies and download Certificates of Insurance (COIs).
NEXT Insurance
NEXT Insurance is 100% dedicated to small businesses and offers tailored ecommerce insurance for new and existing online retailers. Assurers can enjoy a fully digital experience to get a quote and purchase a policy online in about 10 minutes, with 24/7 policy management via web or app. They specialize in providing fast, easy, and affordable protection, serving hundreds of thousands of businesses across over 1,300 professions with a high customer rating.
Special Insurances and Services:
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Specific Coverage for Theft & Destroyed Inventory: Protection against theft (e.g., burglarized inventory) and destroyed products or inventory helps businesses recover financially if their physical goods are wiped out.
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Transparent Tiered Pricing: Clearly outlines three main pricing tiers (Basic, Pro, Pro Plus) with varying coverage limits for different policy types, providing transparency and allowing businesses to select coverage based on their budget and risk appetite.
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Instant Proof of Insurance (COI) & Unlimited Additional Insureds: Policyholders can obtain immediate proof of insurance (Certificate of Insurance or COI) 24/7, with the ability to generate unlimited certificates and add additional insureds as needed.
Types of insurance for ecommerce business
Apart from unique services and special insurance coverage, there are also 9 types of essential liability insurance for ecommerce that every online business should consider to stay protected and resilient.
General liability insurance (GLI)
General liability insurance is a foundational coverage that protects your e-commerce business from common third-party claims. It primarily safeguards against financial losses arising from bodily injury, property damage, and advertising injury.
For instance, if a customer visits your home office or warehouse and suffers an injury, or if your marketing materials unintentionally infringe on another company's copyright, GLI can help cover legal defense costs, medical expenses, and potential settlements. It provides a crucial safety net for unexpected incidents that can occur even in a primarily online operation.
Relevant Insurers: CNA, Farmers, The Hartford, Westfield, Simply Business, NEXT Insurance
Product liability insurance
Product liability insurance mainly serves physical goods. It protects you from claims alleging that a product you manufactured, distributed, or sold caused bodily injury or property damage to a third party.
For example, if a customer claims that a faulty electronic device purchased from your online store caused a fire in their home or a cosmetic product led to a severe allergic reaction, this insurance can help cover the associated legal fees, medical costs, and damages.
Relevant Insurers: CNA, Farmers, The Hartford, Westfield, Simply Business, NEXT Insurance
Inland marine insurance
Inland marine insurance is a specialized coverage designed to protect valuable business assets while they are in transit, stored at temporary off-site locations, or otherwise not at your primary business premises. This is particularly relevant for e-commerce businesses that frequently ship goods, transport inventory between locations, or use mobile equipment for operations.
For example, if a shipment of your products is damaged or stolen while being transported to a customer or a fulfillment center, or if valuable photography equipment used for product listings is lost during an off-site photoshoot, inland marine insurance can cover the replacement costs.
Relevant Insurers: Seel (transit insurance for package protection), CNA, Westfield, Simply Business
Cyber liability insurance
Cyber liability insurance is given its reliance on digital infrastructure and handling of sensitive customer data. This specialized policy provides financial protection and legal support in the aftermath of cyberattacks, data breaches, or fraud. It can cover expenses such as forensic investigations to identify the breach, costs for notifying affected customers, cyber ransom payments, and potential legal fees or regulatory fines.
For instance, if your customer database is hacked and personal information is compromised, cyber liability insurance helps manage the significant financial and reputational fallout.
Relevant Insurers: CNA, Farmers, The Hartford, Westfield, Simply Business, NEXT Insurance
Commercial property insurance
Commercial property insurance protects the physical assets essential to your e-commerce operations, even if your storefront is virtual. This includes coverage for:
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owned or rented buildings
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valuable inventory
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business personal property like computers, packaging equipment, furniture, and fixtures
It safeguards against financial losses due to covered perils such as fire, theft, vandalism, or severe weather.
For example, if a fire damages your storage facility, destroying your entire stock of products, commercial property insurance can cover the costs of replacing the damaged inventory and equipment, allowing you to resume business.
Relevant Insurers: CNA, Farmers, The Hartford, Westfield, Simply Business, NEXT Insurance
Business interruption insurance
Business interruption insurance, also known as business income insurance, provides crucial financial support if your e-commerce operations are temporarily halted due to a covered event. This policy helps replace lost income and covers ongoing operating expenses, such as rent, utilities, and payroll, while your business recovers.
For instance, if a flood renders your fulfillment center unusable for several weeks, preventing you from processing orders, business interruption insurance can help maintain your financial stability by compensating for lost sales and covering fixed costs until you can reopen.
Relevant Insurers: The Hartford, Westfield, Simply Business, NEXT Insurance
Workers' compensation insurance
Workers' compensation insurance is a legally mandated coverage in most states for businesses with employees. It provides essential benefits to employees who suffer work-related illnesses or injuries, regardless of fault. This includes coverage for:
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medical expenses
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rehabilitation costs
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a portion of lost wages
For an e-commerce business, this is vital if an employee in your warehouse or office sustains an injury on the job, such as a fall while handling inventory. Workers' compensation protects both the employee by ensuring their care and the business from potential lawsuits.
Relevant Insurers: CNA, Farmers, The Hartford, Westfield, Simply Business, NEXT Insurance
Business owners policy (BOP)
BOP is a streamlined and cost-effective insurance solution, ideal for small to medium-sized e-commerce businesses. It bundles core coverages, typically including:
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general liability
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commercial property
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business interruption insurance
This protects your business from common risks like third-party bodily injury or property damage, physical damage to your inventory and equipment, and lost income if a covered event disrupts operations.
For instance, if a fire damages your fulfillment center, a BOP can cover the property losses and help replace lost revenue, simplifying your insurance management.
Relevant Insurers: CNA, Farmers, The Hartford, Westfield, Simply Business, NEXT Insurance
Cost of ecommerce business insurance
The cost of business insurance varies significantly based on various factors and situations, including:
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business size and annual revenue
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The risk level of your industry or products
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business location
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Number of employees
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Policy limits and deductibles
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Value of your business assets
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claims history
However, here's an idea of typical monthly costs for common relevant coverages:
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General Liability Insurance: $42 per month
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Product Liability Insurance: $42 per month
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Inland Marine Insurance (Transit Insurance): $14 to $29 per month
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Cyber Liability Insurance: $57 to $145 per month
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Commercial Property Insurance: $67 per month
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Workers' Compensation Insurance: $45 to $86 per month
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Business Owner's Policy (BOP): $57 to $95 per month
How to know which insurance is right for your online store?
Choosing the right one involves a strategic assessment of your unique operations and potential vulnerabilities. It's not about buying every policy, but rather identifying and mitigating the most critical risks. Here are clear steps to guide your decision:
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Assess Your Risks: Begin by evaluating your business model. Do you sell physical products (requiring product liability)? Do you have employees (needing workers' compensation)? Do you store sensitive customer data (making cyber liability essential)? And you need to consider your inventory handling, delivery methods, and whether you operate from a home office or a dedicated facility.
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Compare Providers: You may research different insurance providers and look for those that specialize in or explicitly cater to e-commerce businesses. Request free quotes from several top providers to compare their offerings and pricing.
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Check Coverage and Limits: You should carefully review the policy details, including what is covered, the limits of liability, and any exclusions. Then ensure the coverage aligns with the risks you've identified and that the limits are sufficient to protect your assets.
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Consult an Agent (Optional but Recommended): While educating yourself is crucial, a knowledgeable insurance agent specializing in commercial insurance can offer valuable insights, help tailor policies, and navigate complex options.
Protect your ecommerce business
Good ecommerce business insurance keeps your store resilient, your customers happy, and your balance sheet safe when surprises strike. From understanding common risks to picking the right policy and provider, you’re now ready to protect your online business with confidence. Take the next step today—compare trusted insurers and secure coverage that fits your store’s unique needs. Peace of mind is worth it.
