Drop shipping business owners tend to think that drop shipping a product, selling a product without having to carry them in your inventory, means that you are not responsible for the product.
To an insurance underwriter, drop shipping means that the business owner has less quality control. To an insurance underwriter, Foreign manufacturers present a great risk since it's nearly impossible to hold them accountable for injuries in the U.S. that they should be responsible for.
It's your job as the importer to protect your customers from receiving defective products and ensure that imported products are safety inspected.
With that being said, there is a certain amount of liability a business must assume and drop shipping is obviously no different. Using the correct legal entity and liability insurance is vital to a successful drop shipping business no matter if it sells T-shirts, Tie Clips or Costume Jewelry.
Having the liability insurance can help you protect yourself and your business during hard times, plus it may help you pay for your legal fees if you have to consult with a lawyer.
Getting your drop shipping business insured is a priority that you can't afford to overlook.