Insurance, and what can actually go wrong

Someone at a market asked whether you're insured, you said "yes, probably", and you've been quietly worried about it ever since. Or an organiser emailed asking for a certificate and you don't have one.

Nobody is going to stop you selling £24 mugs from your kitchen because you haven't bought a policy. What will stop you is a market organiser refusing your pitch, or a wholesale buyer refusing your invoice, and both of those are contract conditions rather than the law. The law does require certain cover in certain situations in the UK, most obviously once other people work for you, and the current rule and its exact wording are things to get from the government's own site rather than from an article. Find your country's current position before planning around it.

The more useful question, and the one this piece is actually about: of the eleven things that could realistically go wrong in your first two years, how many does insurance answer? The honest count is about three.

Start with the list, not the policy

Write down what could actually go wrong, in your business, in the order of likelihood. Most sellers who do this discover they've been worrying about the wrong end of the list.

What goes wrong	How likely, honestly	Does insurance answer it
A parcel is lost or smashed in transit	Very. Expect it within your first 100 parcels	Partly, via your courier's compensation, up to a limit
A buyer says they paid and hasn't	Common	No
A buyer wants a refund you weren't expecting	Common	No
Stock is stolen, flooded or burnt at home	Uncommon, ruinous	Yes, if you have the right cover and disclosed the business
Someone trips on your stall and is hurt	Uncommon	Yes, public liability
Your product injures someone or damages their property	Rare, ruinous	Yes, product liability
A card payment is reversed months later	Occasional, card only	No
Your supplier disappears with a deposit	Occasional	No
A platform closes your account	Occasional	No
You are too ill to trade for six weeks	Uncommon	Only with specific cover, usually personal
Someone copies your designs	Common, mostly unpoliceable	No

Three "yes" rows out of eleven. That's not an argument against insurance. It's an argument against treating a policy as the thing that makes you safe, because eight rows on that list are answered by process, terms, and a buffer in the bank, not by a premium.

The three that insurance genuinely answers

Public liability. Covers you when someone who isn't an employee is injured, or their property is damaged, in connection with your business. In practice this is the market stall one. A gazebo blows over, a customer trips on a cable, a box comes off a table onto someone's foot. If you never leave your kitchen you may never need it; the moment you stand behind a table in public, an organiser will almost certainly ask for it, and the certificate they want is a document your insurer emails you.

Product liability. Covers you when the thing you sold causes harm. A glaze that isn't food safe, a candle that behaves badly, a bath product that burns someone, a toy with a part that comes off. This is the cover people skip and it's the one with the worst tail, because the claim can arrive long after the sale.

Your stock and your kit. Not liability at all, just contents. The kiln, the sewing machine, the laptop with every product photo on it, and the £2,400 of finished stock in the spare room in November. If it burns, it's gone, and the timing of that loss is what kills the business rather than the amount.

Everything else on the list has a different answer, and some of the answers are better than insurance.

The home policy trap

This is the part worth reading twice.

Most standard UK home contents policies are written for a household, not a business. Business stock is very commonly excluded or capped at a low figure, and business equipment often is too. So the £2,400 of stock may simply not be covered by the policy you assumed covered your possessions.

The bigger risk is upstream of that. Many home insurance policies ask whether the property is used for business, and some require you to tell the insurer if that changes. If you're storing stock, running a kiln, receiving deliveries and having customers collect, and you never mentioned any of it, you may be in a position where a claim entirely unrelated to the business gets complicated because the insurer says the risk they priced isn't the risk that existed.

Nobody wants a house fire to become a conversation about whether the policy was valid.

The fix is fifteen minutes and free. Read your own policy wording for the words "business", "trade" and "stock", then ring your insurer and describe what you're actually doing. Most household insurers deal with this routinely and either add a clause, add a small premium, or tell you it's fine. Get the answer in writing and put it in the same folder as everything else.

Read your own policy wording before you buy a new policy. The expensive mistake isn't being uninsured. It's assuming you were.

Nadia, ceramic mugs, Leeds

Nadia throws and glazes mugs in a converted garage in Chapel Allerton. £24 a mug, roughly 40 a month online, plus 14 markets a year where she sells another 25 to 30 each time. Call it £18,000 a year.

Here's what she was carrying, and what she wasn't.

She had home contents insurance from before she started, which covered her possessions and said nothing about a kiln. She had no public liability, because nobody had asked for two years. She had no product liability, and she sells things people drink out of. Her courier account came with a default compensation level she'd never read.

Then three things happened in one year, none of them dramatic.

A market she'd applied to for the Christmas run asked for a public liability certificate with her application, six weeks before the event. She didn't have one, and the pitch went to somebody else. That's the most common way this bites: not a claim, a lost booking.

A box of 12 mugs went out by courier and arrived as gravel. £288 of stock and a customer expecting a Christmas present. Her courier's default compensation covered a fraction of it, because default cover on most services is a low fixed figure per parcel rather than the value of what's inside, and the enhanced cover was an option she'd never ticked at £1-something a parcel. She'd sent roughly 480 parcels that year. Buying the enhanced cover on all of them would have cost less than that single box. What to do when a parcel goes missing covers how those claims actually run and what evidence you need to have kept.

And a wholesale buyer, a small independent shop, asked for her product liability details before placing a £900 order. Which is when she learned that trade buyers ask as a matter of course, and consumers almost never do.

None of that was a disaster. All of it was avoidable with two phone calls made a year earlier.

The risks a policy will never touch

This is where most small sellers actually lose money, and there's no premium for any of it.

Someone says they paid. No insurer is interested. The answer is a process: never dispatch on a screenshot, confirm against your own bank, and have a script ready that doesn't accuse anyone. What to say when a buyer says they paid is the one to keep in your notes.

A refund you didn't plan for. Answered by a written policy that you decided on calmly, before it happened, rather than at 11pm with an angry message on your phone. Writing a refund policy people trust is the version that reduces refunds rather than inviting them.

A card payment reversed months later. Chargebacks are a card-rail phenomenon and they run on the card networks' rules, not on your terms and not on any policy you'll buy. If you take card, read your processor's dispute process once, before you need it.

A supplier vanishing with a deposit. Answered by paying deposits on a rail with some recourse, splitting large first orders, and not sending 100% up front to a new supplier because they offered 8% off.

Product safety obligations. Worth separating from insurance entirely, because people confuse them. Cosmetics, food, candles, children's products and anything with food contact carry safety, testing and labelling obligations in most countries, and those obligations exist whether or not you're insured. An insurer may well ask whether you've met them before paying a claim. Find out which regime applies to what you make, in your own country, before you scale up production. For the UK specifically, selling online in the UK sets out the wider landscape of what a seller here has to think about.

Someone copying you. Insurance doesn't help, legal action rarely pays for itself at this size, and the practical defence is being faster and better known than the copy.

How to buy the cover you do need

Three quotes, always, from providers that specialise in small traders and makers rather than from a general comparison site. Craft-specific and market-trader-specific insurers exist, they understand a stall and a kiln, and their forms are written for you.

What they'll ask for: your annual turnover, what you make, what it's made of, whether you attend events, whether you have staff or helpers, and where stock is kept. Have honest answers ready. Understating turnover to reduce a premium is a false economy that surfaces at exactly the wrong moment.

What to check in the quote, in this order:

1. What's the limit, and is it per claim or per year. Two very different products at similar prices.
2. Does it cover the events you attend, including any outside your usual area.
3. Does it cover product liability as well as public liability, or is that a separate line you have to add.
4. Does it cover your stock, and where. At home, at a market, in a van overnight, in transit. Vans overnight are a common exclusion.
5. What's the excess, and is it worth claiming at all for the size of loss you'd realistically have.
6. What happens to claims made after you cancel. Some liability cover only answers claims made while the policy is live, which matters if you stop trading.

Then ask your courier the same kind of question about compensation limits, because for most online sellers the courier is the thing that goes wrong most often and the compensation is the cover you're actually relying on. Choosing a courier you can trust goes through what to compare beyond price.

Where Sailo sits in all this, plainly

Sailo isn't an insurer, doesn't offer buyer protection and doesn't hold your money, and each of those has a consequence for the list above.

Because Sailo never touches money on bank transfer, cash on delivery, or orders that come through WhatsApp, Instagram, Telegram, email or phone, there's no balance to freeze, no payout to withhold, and no scheme a buyer can appeal to. The buyer's recourse is you. That cuts both ways: nobody can reverse a bank transfer on a whim, and nobody will step in and make a difficult customer go away either. You are the dispute process.

Card is different, and worth being clear about. Card payments need a Stripe account Stripe has cleared, the charge lands in your own Stripe account, and Sailo takes 1–3% of the goods as an application fee. Card also means chargebacks, and chargebacks are decided by the card networks. If a large share of your orders are card, that's a real risk category that manual rails don't have.

And Sailo won't confirm a bank transfer arrived. Only your bank can do that. Every payment on a manual rail is checked by you, which is the honest cost of the rails that cost nothing.

The two things to do this week

Ring your home insurer and describe what you're doing, out loud, including the stock and the equipment. Ask them to confirm in writing whether business stock is covered and whether they need anything from you. That call costs nothing and closes the biggest gap most home-based sellers have.

Then get three quotes for public and product liability from small-trader specialists, using honest turnover figures, and file the certificate somewhere you can email it from your phone in ninety seconds. The next market organiser who asks will want it that week, not next month.

While you're in the mood for paperwork, the other document that removes arguments before they start is a set of terms a human will actually read. Writing terms people will actually read covers what to put in them, and do you need to register your business is the piece that sits above all of this.