Do you have "seller insurance"?

[vip-marketplace]

Hey guys!

I'm a bit concerned I may be overlooking a risk of selling online - especially since I sell a lot in the US.

Do you guys have commercial / seller insurance? I am currently in the process of shopping for it but it's ridiculously expensive. It seems the cheapest I can find in ~800$... Do you guys have any insurance?

Are we even at risk of being sued by an item sold on eBay?

For example, if I sell a hair dryer (brand new and from a well known brand) to a US buyer and the buyer claims she somehow burned herself with it and decides to sue me, would I be in a world of trouble?

Thanks!

[ricarmic]

Any business runs the risk of problems requiring insurance. 

The larger the business the larger the risk as well as the type of stuff being sold.

I wish my insurance was only $800.  My business insurance runs about $2,250 a year, but this is liability and stock coverage policies. (I'm a stamp guy)

[reallynicestamps]

We are with Hugh Wood International, a British firm that has offices in Toronto.

Ask for Gina. She's a peach.

The advantage is that HWI insures collectors and collectibles. Also dealers in collectibles.

They actually understand how stock (or a collection ) can fluctuate and how a dealer may buy an estate for $2000, sell bits of it over a month for good money, then sell the remainder for $2000. And have happy customers.

And they also insure exhibits, trade shows, travel to trade shows, mailed stock, car breakins....

[ricarmic]

Mine is the same company as reallynice.

Note that the "cost" of the insurance is related to the amount of inventory, location, style of storage, amount shipped in a year, moved in a year etc. So no two people's insurance amount will be the same.

[zee-chan]

I sell comic books, cookie jar insurance, and have been keeping my fingers crossed that no one will ever sue me over paper cuts. 😂

[vip-marketplace]

Thank you for your reply!

I'm not sure I quite understand why you would pay 2250$/year for insurance.

I assume you're not mainly taking this insurance to cover yourself in case you would get sued by an angry stamp buyer right?

Are you taking this insurance mostly to be covered in case of fire/theft/flood etc. that would destroy your entire inventory?

So... let's say there's a 1/1000 chance at any given year there's a catastrophic event to cause you to loose your entire inventory. Your inventory would have to be 2,250$ x 1000 = 2,250,000$ for it to make economical sens to pay that much for insurance. Or do you suspect to probability of such an event is greater than 1/1000?

Sorry if I'm insisting here but I'm really trying to see what I'm missing here.

Thanks!

[femmefan1946]

@vip-marketplace

You would be amazed at how much value there is in quite small stamp dealer's stocks.

I don't know ricarmic's stock, although he is known and respected in the trade.

But this is a part of our family business.

Here is our  September 2017 catalogue.

https://sparks-auctions.com/auction-25/

Lot #3 sold for $285,000 hammer. The winning bidder also paid a buyer fee and Ontario HST.

HWI covers shoptheft, shipping losses, water (!) and fire damage, losses at shows, losses on the way to shows, as well as various problems like customers being hurt while on our premises.

[ricarmic]

Hi! 

The amount of insurance is related to the amount of risk you want insured.

For ease of discussion, there are two main aspects to business insurance, liability and loss.

The cost of insurance is based on the amount of insurance.

With respect to loss, a hypothetical stock value of $100,000 and in transit of $50,000 per year would cost more to insure than a stock value of $10,000 and in transit of $5,000.

With respect to liability there are many aspects to that, too many to discuss here, but the same rules hold that $1 million of liability insurance costs more than $100,000 liability insurance.

Again for ease of discussion, my insurance cost is about half of each (liability and loss).

No two people will have the same insurance cost because inventory values will be different, in transit coverages will be different, liability risks etc will be different.

Operating a business without insurance means one is bearing the liability/loss risk oneself. 

Does that help?