Did you know that the products you sell affect your insurance premium?

Every year, sellers think long and hard about what products they should sell. The art of prediction comes into play when deciding which trends are around the corner, which are here to stay, and which are on their way out. Will pop-its still sell in 2023? Is tie-dye still a thing? And what about masks? Will we still be wearing them next year?

Product Selection:

In the best-case scenario, you order enough stock of a product at the right price, for it to sell well. But we all know that if we’re behind on trends, we can find ourselves with tonnes of stock bought at the wrong price, at the end of the season. The products we choose to sell have a huge impact on our business, and not just in the way you imagine. Product choice also directly affects the price of your liability insurance.

What does this have to do with liability insurance?

If you’re wondering what product selection has to do with your insurance premium you’re not alone, and here’s your explanation. Insurance carriers quote liability insurance for eCommerce sellers based on what products they sell and how risky those products are (as well as other factors). Every product sold is analyzed by how risky it is and what is the probability that a claim will be brought against the insurer. Items like trampolines are risky because they have high accident rates, meaning insurers are weary of insuring them. While products like t-shirts have much lower claim rates, inclining insurers to provide cheaper premiums. In other words, if in 2022 you sold socks and in 2023 you plan to sell children’s toys, you will probably see a spike in your liability insurance premium because children’s toys are considered risker products than socks. Makes sense no?

Do you have to stop selling certain products now?

Now, don’t worry, you don’t have to stop selling children’s toys next year and go back to selling socks. And you don’t have to miss out on upcoming trends because those products might be risky. But it is worth getting to know the risk factors of the products you sell. And it’s even more important to plan your next financial year while taking the price of your liability insurance into account. 

What’s the solution?

But there is also a way to ensure that you get liability insurance that actually covers the products you sell and does so at the best price, no matter what. By purchasing insurance through Spott, you guarantee that insurance carriers don’t overestimate how risky your store is and that you aren’t overpaying. Our digital underwriting helps bridge the gap between seller and insurer, accurately assessing the risk in any eCommerce business. Insurance for eCommerce businesses is complicated. With Spott, it doesn’t have to be. Get a quote today to start saving.


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