Etsy and eBay Seller Insurance
Neither Etsy nor eBay requires sellers to carry liability insurance, and both make clear that the product risk sits with you. Here is what that means for makers and resellers, and when a policy earns its place.
What Etsy and eBay require
Neither platform sets an insurance requirement for sellers. eBay’s User Agreement, effective June 28, 2026 for existing members, says eBay is not a party to contracts between buyers and third-party sellers and does not control the quality, safety or legality of listed items. It has each seller assume full responsibility for the items offered, and it has every member indemnify eBay against third-party claims.
Etsy takes the same position. Its rules for sellers put the laws, labels and warnings that apply to each product on the seller who lists it. For children’s items, meeting the rules of every market a shop ships to is the seller’s job, not Etsy’s.
eBay’s agreement adds a line on international sales: buyers and sellers are each responsible for following the laws that apply to a cross-border sale. A US seller shipping a hair dryer to Germany or a toy to Australia takes on that country’s product rules along with the parcel.
What refund programs do and do not handle
Both platforms run buyer refund programs, and sellers sometimes mistake them for coverage. Etsy’s order protection for sellers is built around delivery and listing problems, such as packages that never arrive or items that do not match the photos. eBay’s buyer program returns the buyer’s money when an item fails to arrive or differs from its description.
Neither program reaches injury or property damage. If a scented candle bought on Etsy starts a kitchen fire, or a vintage space heater sold on eBay shorts out, the refund program has nothing to say and the claim goes to the seller. That gap is the one product liability insurance fills.
Makers on Etsy: handmade still carries risk
Etsy sellers make things at the kitchen table, and those things touch skin, food and children. Soap, candles, bath bombs, lip balm, jewelry, baby clothes, teething toys and pet treats all carry real injury exposure. A homemade balm that sets off a reaction or a wooden toy with a loose part leads to the same kind of lawsuit a factory product would.
Plenty of makers assume a homeowners or renters policy protects the shop. Home policies typically exclude business activity or cap it at a small amount, and products sold to the public sit outside them. Our page on home-based business insurance explains how a business policy closes that gap.
Underwriters care about ingredients as much as the finished piece. A soapmaker who buys fragrance oils with safety data sheets and records batch numbers presents a different risk from one who mixes unlabeled ingredients bought in bulk. Keep that paperwork, because it is the first thing a defense lawyer asks to see.
Resellers on eBay: secondhand goods still carry risk
eBay resellers often believe that selling used items keeps them clear of product claims. A reseller who sells a recalled stroller, a car seat past its expiration date or a refurbished power tool with a frayed cord is part of the chain of distribution, and an injured buyer’s lawyer tends to name everyone in that chain.
Check the CPSC recall list before listing children’s gear, electronics and anything with a heating element or battery, and keep a note that you checked. Underwriters ask about that habit. Resellers who repair or modify items take on more exposure than those who sell items as found, so tell the underwriter which kind of reseller you are.
Volume resellers who buy pallets of customer returns or liquidation stock face the sharpest version of this. The item’s history is unknown, recalls are common among returned electronics, and the reseller is the last name in the chain before the buyer. Screen the stock, pull recalled items, and describe your sourcing to the underwriter plainly.
When an Etsy or eBay seller should buy a policy
A policy earns its place when any of these is true: you sell items that go on skin, into mouths or into children’s hands; your sales have grown into a real income; you sell at craft fairs or markets that ask vendors for a certificate; you wholesale to shops; or you are about to add Amazon or Walmart, where insurance is a written rule. Compare those rules on our Amazon seller insurance requirements page and the Walmart Marketplace guide.
General liability with products-completed operations is the base. Resellers who hold rare or high-value inventory, such as watches, trading cards or vintage electronics, should also ask about property coverage for that stock wherever it is stored.
Buy before you need it. A typical small-business product policy responds to injuries that happen while it is in force, so a policy bought the week after a customer is hurt does nothing for that customer’s claim.
Etsy, eBay and the weekend market
Plenty of sellers run an Etsy shop, an eBay store and a table at weekend markets all at once. One general liability policy handles all three when the application lists each of them. Markets add a premises exposure that online sales lack: a canopy that blows into a passer-by, or a shopper who trips over a display crate.
If you plan to add your own website, the same policy carries over to it. A standalone store brings customer data questions that a cyber policy answers, which matters once you hold your own email list and order records rather than letting the marketplace keep them.
Getting a quote as a small seller
Have your annual sales by platform ready, along with a list of what you sell, where the goods come from, and whether you make, modify or resell them. Add the name of any craft fair or retailer that has asked for a certificate. Makers should include ingredient lists and label photos for anything applied to the body. If a market organizer or shop has already sent a certificate request, include it too, since the wording on that request shapes how the endorsement is written.
We work with hundreds of Amazon sellers, and the same policy structure scales down to a one-person Etsy shop or a weekend eBay store. Start at the Amazon seller insurance hub to see where each marketplace sets its bar.
A few useful answers
Common questions
Does Etsy require sellers to have insurance?
No. Etsy sets no insurance requirement, but its seller rules leave the laws, labels and warnings for each product with the shop.
Does eBay require seller insurance?
No. eBay’s User Agreement has sellers take full responsibility for the items they list and indemnify eBay against third-party claims, without requiring a policy.
Does Etsy's order protection help with injury claims?
No. It is built for delivery and listing disputes. Injury and property damage claims go to the seller.
Does homeowners insurance protect an Etsy shop?
Rarely for product claims. Home policies typically exclude business activity or limit it to a small amount, and products sold to the public sit outside them. A business policy fills that gap.
Do craft fairs ask Etsy sellers for insurance?
Many fairs and makers markets ask vendors for a certificate naming the organizer as additional insured. A general liability policy with products coverage answers that request and protects your online sales at the same time.