E-Commerce & DTC Coverage Guide
E-commerce combines product liability (you 'sold' it, even if you didn't make it), supply-chain interruption, and cyber liability (PCI-DSS, breach notification). The 'amazon-aggregator' model has its own underwriting requirements.
Critical Coverage
Cyber Liability
Covers data breaches, ransomware, and digital threats
What it covers
PCI-DSS breach response, payment card processor fines, customer data breach notification, ransomware, business interruption from outages.
Common misconception
Shopify/BigCommerce stores think 'the platform handles security.' You're still responsible for your accounts, app permissions, and customer data — and PCI fines flow through to merchants.
What it does NOT cover
Unencrypted data. Voluntary disclosure.
The gap — what happens without it
Skimmer injection on checkout exposes 6,000 cards — PCI fines, notification, monitoring: $290K. Cyber pays.
What drives your premium
Records, MFA, transaction volume
Endorsements to ask about
PCI fines & assessments. Funds-transfer fraud.
Product Liability
Covers claims from products you manufacture, sell, or distribute
What it covers
Bodily injury and property damage claims from products you sell — even if you didn't manufacture them. The 'sealed container doctrine' provides some defense, but plaintiffs name retailers in product suits as a matter of course.
Common misconception
Dropshippers think they're not liable because they didn't make the product. They are 'sellers' under most state product-liability statutes — full strict-liability exposure.
What it does NOT cover
Recall costs (separate). Pure financial loss without injury.
The gap — what happens without it
A product you sold causes a small fire — $45K property damage claim. Even though you didn't make it, you're named in suit. Product liability defends and pays.
What drives your premium
Annual revenue, product categories (children's, electrical = highest), # of SKUs, claims
Endorsements to ask about
Vendor's endorsement (additional insured for marketplaces). Recall coverage. Worldwide products coverage.
Important Coverage
General Liability
Covers third-party bodily injury and property damage claims
What it covers
Premises (warehouse/office), advertising injury (trademark in ads), product-injury liability before product is sold.
Common misconception
Online sellers think they don't need GL — they do for warehouse premises and advertising injury exposure.
What it does NOT cover
Product liability (separate). Cyber.
The gap — what happens without it
Visitor trips at warehouse — $9K. GL pays.
What drives your premium
Premises, employees
Endorsements to ask about
Hired/non-owned auto. Product withdrawal/recall.
Commercial Property
Covers your building, equipment, and inventory
What it covers
Inventory at warehouse, fixtures, computers. 3PL storage often requires bailee coverage extension.
Common misconception
3PL warehouses don't insure your inventory. You need your own coverage.
What it does NOT cover
Flood. Earthquake. Theft from unsecured locations.
The gap — what happens without it
3PL warehouse fire destroys $180K of inventory. Your commercial property pays.
What drives your premium
Inventory value, location, warehouse type
Endorsements to ask about
Property at 3PL/bailee. Goods in transit.
Business Interruption
Covers lost income when operations are disrupted
What it covers
Lost income from covered property loss; some policies extend to dependent properties (your supplier's loss affecting you).
Common misconception
E-commerce thinks BI doesn't apply because they're 'online.' Warehouse/3PL fires can shut you down.
What it does NOT cover
Pandemic. Cyber-related outages (separate).
The gap — what happens without it
3PL fire shuts down fulfillment 6 weeks; lost revenue $240K. BI pays with dependent property coverage.
What drives your premium
Revenue, restoration
Endorsements to ask about
Dependent property. Civil authority. Extended period.
Not sure what you need?
Text us your trade and state — we'll tell you exactly what coverages apply to your business and shop the market for the best rate.