Are You Selling Kids’ Items This Back-To-School Season? Your Liability Insurance Premium Might Be Affected!

Kids are cute, right?

Kids are cute. They also make great customers. No seriously, there is a reason why so many eCommerce sellers find selling items for kids to be so profitable. Kids are easy to please. They are always on the lookout for new clothes, toys, shoes, gadgets, and much much more. If you have kids, you know that when they want you to buy them something, they’ll stop at nothing to get you to buy it for them. 


But from an insurance perspective, kids are dangerous.

In all seriousness though, when it comes to liability insurance for your eCommerce business, kids can be… a little tricky. Don’t get us wrong. It’s not that they aren’t cute, and it’s not that they don’t really pose the ideal eCommerce customer, it’s just that they have a tendency to be a little accident-prone, to say the least. And that’s an issue when it comes to insurance.


You see, the insurance industry puts items that are meant for use by kids in categories of their own. When an insurance carrier looks at your business to give you a quote, they try to assess the potential risk you pose to them. In other words, they try to predict the likelihood of them having to payout on your behalf in an insurance claim. In order for them to do an accurate job, they use categories. So if your business sells items aimed at kids, you’re selling in a ‘risky’ category.

What are insurance categories?

Categories are divisions or groups used by insurance carriers to quantify risk. Among many other factors, insurers will look at what you’re selling to define which category you belong to, what kind of a risk that category poses, and give you a policy that is priced accordingly. Think about your car insurance for example. If you’re a young male, your insurance premium is probably significantly higher than that of a middle-aged female. That’s because young men have higher chances of being involved in accidents than middle-aged women. They pose higher risks to insurers, and therefore their premiums are generally more expensive.


Back to children’s items. Because of the high likelihood that children will misuse a product and hurt themselves, insurance carriers put businesses that sell items such as toys, gadgets, baby products and more, in high-risk categories. And high-risk categories mean higher insurance premiums.

What does this mean for you as an eCommerce seller?

If you sell toys online this may not be news to you. You may have a hard time explaining your line of business to traditional insurers and you may get quoted ridiculous prices for your liability insurance. If that sounds like you, getting a quote through Spott increases your chances of getting a fairly priced policy. That’s because our platform allows them to better assess the risk you pose to them. With Spott, categories don’t define you, and insurance carriers have greater visibility of who you are as a seller.


But what if your store changes seasonally? And sometimes you sell bedding and slippers, but in Q4 you sell toys too? Does the category rule apply to you too? The answer is yes. When applying for liability insurance, you will be asked by the insurer what you currently sell/plan on selling in the upcoming year. The policy you get will cover you just for items under the information you provided. Therefore, even if you sell toys, just for a short period of the year, you will still need to disclose this information to the insurance carrier and will be categorized accordingly. That being said, Spott understands eCommerce businesses better than anyone else and when it comes to getting insured, Spott knows how to present you and your business in the best way possible to guarantee that you are never paying more than you should for insurance.


Get a quote today to save up to 30% on your liability insurance. No matter what you sell, Spott is here to help.


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