{"id":21433,"date":"2026-04-07T13:32:31","date_gmt":"2026-04-07T12:32:31","guid":{"rendered":"https:\/\/www.policybee.co.uk\/blog\/?p=21433"},"modified":"2026-04-07T13:56:47","modified_gmt":"2026-04-07T12:56:47","slug":"do-i-need-insurance-for-etsy-sellers","status":"publish","type":"post","link":"https:\/\/www.policybee.co.uk\/blog\/do-i-need-insurance-for-etsy-sellers","title":{"rendered":"Do I need insurance to sell things on Etsy?"},"content":{"rendered":"\n

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Handcrafted gifts made with love, care, and attention, are at the very heart of what you do.<\/p>\n\n\n\n

And by doing what you do, you give shoppers a chance to treat themselves to a special something or spark someone else’s joy with a gift.<\/p>\n\n\n\n

Unfortunately, that feel-good factor can quickly dissipate if you run up against expensive, time-consuming problems that take you away from the crafting bit of your business.<\/p>\n\n\n\n

Banking on the goodwill of others will only get you so far. Protect yourself with insurance for Etsy sellers, though, and you can get on with doing what you love, knowing your business is in safe hands.<\/p>\n\n\n\n

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Is insurance for Etsy sellers compulsory?<\/strong><\/h2>\n\n\n\n

In a word: no.<\/p>\n\n\n\n

Etsy doesn\u2019t require you to have insurance to sell on their website. But it\u2019s essential if you want to safeguard your online shop from surprise events that could put it out of action.<\/p>\n\n\n\n

Like your stock getting stolen or damaged, leaving you without a thimble to sell. Or a customer demanding compensation after something you made sets off a severe allergic reaction. Or suing you for losing their personal data to cybercriminals. <\/p>\n\n\n\n

Problems like these take time and money to sort out. What\u2019s more, they take you away from the day-to-day running of your business.<\/p>\n\n\n\n

Pile on court costs, legal fees, compensation costs, and lost revenue, and you could be looking at some hefty losses.<\/p>\n\n\n\n

The comparatively small amount you spend on insurance for Etsy sellers, though, goes a long way towards fixing those problems. It rights your wrongs, covers any compensation you\u2019re liable for, and keeps you up and running. No matter what.<\/p>\n\n\n\n

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Here\u2019s a good yarn<\/strong><\/h2>\n\n\n\n

There’s nothing like a bit of crafting to beat away the blues.<\/p>\n\n\n\n

During the COVID-19 pandemic, demand for handcrafted products and crafting supplies soared \u2013 everything from homemade facemasks to DIY craft boxes and macram\u00e9 kits.<\/p>\n\n\n\n

Luckily for Etsy and its 5.6 million sellers, the demand has stayed high with 86.5 million active buyers in 2025<\/a>.<\/p>\n\n\n\n

5.6 million sellers, that’s a lot. And these fledgling businesses, especially, might not know where they stand on their business insurance; what they need, what\u2019s covered, and how it works.<\/p>\n\n\n\n

Let\u2019s start with some basics, then.<\/p>\n\n\n\n

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What does insurance for Etsy sellers cover? <\/h2>\n\n\n\n

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Protection for the things you make<\/strong><\/h3>\n\n\n\n

Product liability insurance covers you against claims where one of your products hurts a customer or damages their property, and they seek compensation in return.<\/p>\n\n\n\n

Certain handmade or handcrafted products are more likely to harm than others, so will likely need insuring eg jewellery, cosmetics, body and bath products, candles, wax melts, kids\u2019 clothes, and food and drink.<\/p>\n\n\n\n

In other words, anything that can be eaten, swallowed, or applied topically should probably be protected with products liability insurance.<\/p>\n\n\n\n

Same goes for anything with buttons, threads, or fabric scraps that could easily come off and get hoovered up by the family pet or swallowed by a child.<\/p>\n\n\n\n

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Protection for accidents on your premises<\/strong><\/h3>\n\n\n\n

Public liability insurance<\/a> for Etsy sellers covers claims of accidental injury or damage to anyone who comes into direct contact with your business.<\/p>\n\n\n\n

Like a courier who comes a cropper on your slip-slidin’ doormat, breaks their hip and has to take time off work. Or Joe Public seeking compensation after your pop-up market stall pops down on top of them. <\/p>\n\n\n\n

Just as with product liability insurance, it pays for your legal expenses, as well as any compensation you\u2019d need to pay.<\/p>\n\n\n\n

It may be essential if you occasionally sell at markets and craft fairs; many venues ask for it beforehand.<\/p>\n\n\n\n

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Protection for your employees<\/strong><\/h3>\n\n\n\n

Employers\u2019 liability insurance<\/a> is a legal requirement if you employ any non-family members. It covers your staff if they get ill or injured while working for you. Even if they\u2019re temporary, part-time, or volunteers.<\/p>\n\n\n\n

It’s useful if you hire an extra pair of hands at Christmas to help pack and ship your products – and they get bitten by the dog. Or if an accident with a wayward crafting knife means they’re prescribed stitches and some time off work.<\/p>\n\n\n\n

What\u2019s more, the Health & Safety Executive can fine you \u00a32,500 for every day you don\u2019t have it<\/strong>. That’s enough for anyone to sit up and take notice.<\/p>\n\n\n\n

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Protection for your online risks<\/h3>\n\n\n\n

Cyber insurance<\/a> is a handy thing to add to your shopping basket. It\u2019s designed to protect you from the kinds of online risks that could shut down your computer and stop you from selling online. <\/p>\n\n\n\n

Like a ransomware attack that freezes your screen and hits your profits sideways. Or a data breach that compromises your customers\u2019 personal info, prompting them to come after you for compensation.  <\/p>\n\n\n\n

Unfortunately, selling on a third-party site like Etsy doesn\u2019t make you immune from these kinds of disaster scenarios. So, it\u2019s best to be prepared.  <\/p>\n\n\n\n

Cyber insurance provides technical experts to help you to stop a cyber-attack and fix your systems. As well as legal advice for dealing with any resulting data-related claims or regulatory investigations.  <\/p>\n\n\n\n

You can even add on extra protection for financial cybercrime (social engineering, ID theft, fraud, etc)\u00a0as well as lost income for if you’re temporarily unable to trade online.\u00a0\u00a0<\/p>\n\n\n\n

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Protection for your stock and property<\/strong><\/h3>\n\n\n\n

Last but not least, stock and property insurance<\/a> pays out to replace your business’s lost, stolen, or damaged stock and equipment if there’s an accident. <\/p>\n\n\n\n

For example, if a burst pipe leaves all your stock water-damaged and wipes out your PC or laptop. Leaving you unable to ship out orders. <\/p>\n\n\n\n

It’s usually best not to count on your home insurance policy to cover your losses where your business equipment’s concerned. Unless specified, most policies wouldn’t cover the items you’d need to run your Etsy business.<\/p>\n\n\n\n

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A stitch in time<\/strong><\/h2>\n\n\n\n

In a sense, knowing what Etsy sellers’ insurance you’d need is only half the battle. You also have to make sure it pays out when you need it to.<\/p>\n\n\n\n

To make sure this happens, you need to make sure you\u2019re not doing anything illegal that\u2019d stop your insurance from doing what it’s meant to do. Forewarned is forearmed, as they say.<\/p>\n\n\n\n

In other words:<\/p>\n\n\n\n