What is eBay Seller Insurance? A Beginner’s Guide
When you become a seller on eCommerce platforms such as eBay, you face numerous problems and disputes from your consumers in the form of product damage, shipping delays, stolen packages, property damage, consumer injuries, and more. These disputes are known as ‘liabilities’ that eBay Seller Insurance covers and helps you protect your business.
What is eBay Seller Insurance?
eBay Seller Insurance is provided by third parties to protect your business from incurring losses due to liabilities claimed by customers on eBay.
There are different kinds of insurance that vendors provide to eBay sellers. These include:
- Shipping Insurance
- Business Insurance
- Liability Insurance
- Commercial Property Insurance
- Cyber Liability Insurance
- Product Recall Insurance
There might be overlaps between any two categories from the above list based on the vendor a seller chooses and what they cover. More often than not, these insurances cover:
- Manufacturing Defects
- Mislabeled Products
- Missing Labels or Warnings
- Rented or Personal Property Damage
- Bodily Injury
- Return of Products
- Damage to Seller Warehouse
- Damage to Products
Besides these, numerous other eBay claims can be covered through insurance. We’ll look at these in detail in a later section. eBay business insurance reduces the cost overhead and mitigates losses. While insurance isn’t compulsory by the platform, it is crucial to understand eBay Seller Protection Plan.
eBay Seller Protection Policy
The eBay Seller Protection Policy helps you with scenarios where things are not in your control. A few of these scenarios include:
- You have shipped an item on time, but it has arrived late.
- Disruptions associated with the carrier, natural disasters, or an issue in the supply chain.
- You receive a returned item that is used, damaged, or opened.
- There are changes to an order or if the consumer has made an additional request.
- A buyer hasn’t paid or has retracted their bid.
- The consumer is filing too many complaints or is returning too many orders.
- You ship within the stipulated time to an international consumer.
These are a few scenarios in which the platform can protect you. Furthermore, the policies differ from region to region as well. For instance, if you’re a seller from the UK, you can check the eBay Business Seller Policy (UK).
However, despite this protection, there are scenarios where eBay wouldn’t be able to help you. For this, you’ll need to understand the different kinds of challenges eBay sellers face.
Challenges that eBay Sellers Face:
Some of the most prominent challenges of eBay sellers are as follows:
- eBay doesn’t protect its sellers from third-party claims such as product liability claims.
- The eBay protection plan also excludes certain kinds of items or products and doesn’t protect businesses if those items are involved.
- Sellers face a separate set of challenges with their insurance vendors:
- The policies are unnecessarily complicated.
- Various crucial aspects, at times, are not covered by the vendor.
- Claiming insurance is a tedious and extensive process.
- Sellers face account suspension due to incorrect feedback from the customers.
- The feedback also impacts the seller’s ratings and takes the tag of Top Sellers away from them, thereby affecting sales.
- Since eBay relies on shipping carriers such as USPS, FedEx, and a few others, their lack of performance can also affect the business. Therefore, while the eBay seller protection policy can help you in some ways, it will work in various other scenarios.
This is precisely why sellers such as yourselves would require insurance. Let me take you through the most prominent insurances from the above section in detail.
Types of Insurance Policies
- Liability Insurance
This is perhaps one of the most important types of insurance and covers different aspects of a business:
- Product Liability: This is leveraged when there are accusations of negligence. It happens when a product you sell injures a customer/makes them ill, or damages their property.
- Public Liability: This is when third-party partners such as suppliers or shippers face damages or injuries after coming in contact with your product.
- Employer’s Liability: When your employees, volunteers, consultants, or anyone working with you suffers an injury or an illness, this insurance can be used.
- Stock/Property: When your goods/products or warehouses where you store your inventory suffers damages, this insurance covers you. It also includes natural disasters or any other event.
All these types of insurance can come under Business Insurance provided by various vendors.
2. Cyber Liability Insurance
When your accounts get suspended or you get locked out, this type of insurance comes in handy. Furthermore, it covers any entry point for cybercriminals to disrupt your operations and workflow, including email, website, communications portal, bank accounts, and more.
3. Product Recall Insurance
Sometimes the batches of products might face manufacturing defects, and as a result, they must be recalled. So, to cover expenses of disposing of, testing, sending out public safety messages, extra fees for people on your payroll, and more would require a lot of money.
This can be covered with this type of insurance. Sometimes, you’d also require brand rehabilitation, which the insurance would cover.
Overall, these are the major insurance you can access as an eBay seller. However, if you’re confused about whether to have insurance or not, here are a few factors that can help you decide.
What kind of Sellers Should Buy eBay Business Insurance
Usually, the seller insurance is required for businesses that:
- Work with a massive volume of customers
- Are labelled as a Top Seller
- Supply products that have a higher degree of risk associated with them
- Have a hired workforce and also work with third-party drop shippers
- Supply products in bulk or wholesale
How Can Spott’s Liability Insurance Protect Your Business?
Spott provides liability for eBay sellers with zero hassle. As digital brokers who really understand eBay, sellers know that they are not only purchasing a policy at the best price, but that their policy is entirely compliant with eBay’s ever changing requirements. Spott saves time for eCommerce sellers, getting them insured in record time and with no unnecessary paperwork. We read the fine print so you don’t have to.
Spott can analyze your business and the risks involved and accordingly provide insurance policies at the best price that really suit your needs. Considering the current status quo, Spott makes the entire process simple and uncomplicated. Based on your requirements, it will directly apply to insurance carriers, find out the policies that best suit your needs, and help you purchase them.
Overall, this is all you need to know about eBay Seller Insurance and how you can get yours today from Spott.