8 Reasons Why eCommerce sellers aren’t getting a quote

Whatever the reason is, if your application for eCommerce insurance has been denied it can be frustrating, to say the least. Whether Amazon’s product liability requirements won’t allow you to set up shop or the risk that is facing your business is eating away at you, you want your eCommerce store covered ASAP and understandably so. As long as your business is uninsured, you’re risking getting into some big financial trouble and that is something that all online sellers should strongly avoid. 


Here you will discover 8 potential reasons why your liability quote application has been declined and how it can be avoided:

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Your product classification is inconsistent

You may not have noticed, but the product you listed to your insurance provider has not been classified correctly. Insurers use product categories to determine what you sell and what kind of a risk it poses for them. Categories are also a way for eCommerce platforms to determine where to sell your items on their site. If you’re asking yourself, “Why is my product not selling?” One of the biggest eCommerce challenges is channeling potential customers to your product and converting them into buyers. Correct product classification will not only help you get insured but will also help potential customers find what they are looking for in your store. Product classification can vary depending on the insurer, so if unsure, Spott can provide you with their professional assistance, making sure that your Egyptian cotton bed sheets aren’t classified as camping gear by mistake.

You are selling prohibited products

Items for sale on eCommerce platforms must meet all laws and regulations of that platform’s policies. Amazon is constantly updating the list of products banned for sale on its platform. As an Amazon seller, if your product is on that list it could result in your selling privileges being suspended, terminated, or in this case, having your insurance application knocked back. Whether it be Amazon, Shopify, or Walmart, Spott will be able to direct you on which products are allowed and which are a no-go. 

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You are selling illegal items

Many considerations need to be made when choosing the product you wish to sell on Amazon. This one may appear to be obvious, but you would be surprised. There is no need to elaborate on the problem and how it can be solved, but to keep it short, you won’t be getting insured any time soon if you’re looking to sell your organs on Shopify or firearms on Amazon (but that may be the least of your worries). 

Your business model is undefined

If you haven’t determined what your business model is, then this could result in your application being refused. If you’re new to eCommerce and still don’t understand all the different terminology and methods, then the topic of eCommerce business models can be confusing but critical. As an eCommerce seller, you may be a reseller, a drop shipper, a manufacturer, a wholesaler, and the list goes on. Upon sending your application, you must be able to differentiate between these categories and clearly define the type of business you hold. If you’re still unsure, get in touch with one of Spott’s consultants for their professional guidance on the topic. 

Your product is too risky to insure

Some insurance carriers may exclude your product from their coverage as they consider the risk to be too high. The whole idea of insurance is to provide coverage for events that are unlikely to happen but you can’t bear the cost alone. So when the chance of something bad happening is too high, they may simply refuse to cover your product. Examples of products that are likely to be refused coverage are  hazardous materials, high-value items, currencies, or gemstones. If you’re planning on selling 2-carat diamond rings and your request for insurance keeps on being declined, then you’ll probably require professional assistance in finding an insurance carrier who will agree to cover you, and that’s where Spott comes into the picture. 

You have a non-US eCommerce store

Any business selling into the US is at risk of being sued if something goes wrong, making it even more crucial that your business is insured. But this is where the problem comes in. Most non-United States entities are at a big disadvantage if they don’t have a local presence in the US. Many non-US insurance carriers refuse to cover non-US entities as they are out of their scope and prefer not to deal with foreign laws, customs, and local regulations. On the other hand, US insurance carriers often refuse to cover non-US entities as they are not US based. In other words, if you are an Australian entity and wish to sell on and require insurance, you are kind of screwed because Australian insurers are hesitant about insuring sellers out of Australia, and US insurers are hesitant about insuring non-US entities. If you’re looking to penetrate the US market and are not sure who will have you covered, Spott’s technology will find you the insurance carrier that will have your business operating safely and insured and with a lot less stress.

You’re filling in your forms incorrectly

No matter how straightforward the form is, the simple fact that it’s a form and needs to be filled in is enough to confuse us. Whether your answers are mixed up or you’ve misread the questions, even the slightest error can have your application rejected. Insurance forms require comprehensive and detailed responses as they must cover all bases, but most importantly cover their a****. New laws, regulations, and messy court cases have made insurance applications a complicated task.  Spott will be able to assist you in making sure that your application answers all the required fields accurately and is “rejection-proof”, so get in touch before getting knee-deep in application forms. 

You’re not providing the correct paperwork

Insurance carriers require various documentation to accept and process your application. The paperwork varies depending on the carrier but can include product lists, price lists, business licenses, financial reports, and other forms of documentation that most people don’t have on hand. In the case that you have not provided the correct or sufficient paperwork, your application may be declined. This is where Spott comes into the picture, as no paperwork is required whatsoever. Spott gathers its data by analyzing your eCommerce store, making it entirely paperwork free, saving you time and a massive headache. 


If your online store has recently been refused insurance, don’t take the risk and operate without it. Insufficient insurance will put your business at risk. Lucky for you, there are specialist eCommerce insurance carriers that offer coverage to businesses that are considered to be too high-risk, and this is where Spott comes in. While you may have been turned down by  several insurance providers and about to give up all hope, Spott’s professional experience and guidance can bridge that gap and have your business in safe and insured hands in no time. Get in touch with Spott today to see how easy and stress free getting liability insurance can be.


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