You’ve poured your heart into your beauty brand — mixing scrubs in your kitchen, crafting clean and effective skincare. Insurance is probably the last thing on your mind. But what if your product causes a rash? Or a customer claims your label misled them?
TL;DR:
If you sell skincare, soap, or beauty products, you’re legally responsible for what happens after the sale. Beauty product liability insurance protects you from lawsuits, meets platform requirements (like Amazon), and starts at just $99 per month with Insurance Canopy.
What Kind of Insurance Do Beauty Product Sellers Need?
Think of insurance like skincare for your business — protective, essential, and designed to keep you looking good in the long term. You need:
Product Liability Insurance
This is the must-have. It protects you if:
- A customer experienced an unexpected reaction to your product (a rash, burn, or skin breakout)
- Something goes wrong with product labeling, packaging, or instructions
- A customer claims your product caused harm — even if you did everything right
General Liability Insurance
Often bundled with product liability, general liability (GL) is foundational business coverage (not an optional add-on). It’s especially important if you sell in-person, lease commercial space, or do any type of marketing. GL typically includes:
- Medical coverage for customer injuries on your premises, regardless of who’s at fault (yes, even at a pop-up booth)
- Protection for in-person sales at markets, salons, or trade shows — many venues require this
- Advertising injury coverage, in case you’re sued for things like copyright use or product claims
Even if you run your business out of your home and only sell online, GL covers risks that still apply (like accidental injuries, mislabeled content, or advertising disputes).
The Most Common Risks for Skincare & Cosmetics Brands
Building a beauty brand is exciting, but it comes with some unexpected risks, especially once you start selling online, in stores, or at events. Even small-batch, handmade products can face big liabilities.
When Good Products Go Wrong (And It’s Not Your Fault)
Even if your formulas are clean and your intentions are pure, things happen. Such as:
- A customer’s skin breaks out (even though your ingredients were listed clearly)
- A product melts, leaks, or stains clothing
- Amazon suspends your shop over a customer complaint
- A retailer won’t stock your goods unless you show a Certificate of Insurance (COI)
These types of risks are surprisingly common in the beauty industry (especially for new or fast-growing businesses). Many first-time founders don’t realize the real exposure that comes with launching a makeup or skincare line until something goes sideways.
“Insurance is a way to manage risk, but can also be leveraged as a tool to build trust and establish legitimacy. Entrepreneurs and first-time founders should consider including insurance in their business plans and growth strategies.”
Is Insurance for Beauty Products Required?
Technically, no. But practically? It’s a yes. While most U.S. states or the FDA (Food and Drug Administration) don’t mandate it, real-world selling platforms often do. Plus, not having coverage can put your brand and bank account at risk.
Here’s a quick guide to when beauty product insurance is required:
| Platform / Situation | Insurance Required? |
|---|---|
|
Amazon |
Yes (if sales exceed $10,000 per month) |
|
Etsy
|
No (but strongly recommended) |
|
Retail stores |
Often yes |
|
Local markets or pop-ups |
Often yes |
|
State or city requirements |
Sometimes |
How Beauty Product Insurance Helps You (Beyond Just Lawsuits)
Having beauty product insurance is essential. It’s not just about checking a legal box — it’s about brand protection, smart decisions, and building your business with confidence.
- You can list “insured” in your brand materials. This adds credibility and trust to your label, website, and pitch decks.
- You’re ready to grow into stores or marketplaces. Whether that’s retail stores, subscription boxes, or online platforms, you can back it up because you’ve already invested in risk management.
- You avoid surprise legal bills. You’re protected from unexpected costs that could derail your launch or stall your business growth.
- You position yourself as a trusted seller, which makes buyers, partners, and retailers feel more confident working with you.
- You sleep better at night knowing you’re covered. Enjoy peace of mind that you’re building a beauty business that lasts.
What Can Happen If You Sell Beauty Products Without Insurance?
Most articles focus on what insurance covers, but very few discuss what happens if you don’t have it. Understanding the downside of going uninsured helps creators make more confident, informed choices.
Here’s what’s really at stake when you skip insurance for selling beauty products:
- Paying $10,000+ in legal fees if someone files a claim — this is a massive financial risk for any indie brand
- Getting suspended from Amazon or Etsy for failing to meet platform compliance requirements
- Losing out on partnerships with boutiques or salons that expect retail readiness and proof of coverage
- Being held personally responsible for product-related harm — a real example of liability exposure, even if you followed every guideline
- Missing out on local events, fairs, and markets due to lack of insurance — a form of business interruption that can slow your growth
Justin Killingsworth, founder of The Color Bar, learned this lesson firsthand:
“A supplier changed a formula without flagging it. A client had a reaction to a product that had been used hundreds of times before. That’s when it hit me: no matter how careful you are, things can still go wrong.”
He added, “Here’s what I wish someone had told me earlier: [product liability insurance] is not just for big companies. If you’re selling products — especially online — you need coverage. Many platforms like Shopify, Amazon, and even pop-up markets require it now.”
Selling Beauty Products? Here’s When to Get Product Liability Insurance
Before you sell your first product? Perfect.
Already selling? It’s not too late — start now!
You don’t need a team of lawyers or a warehouse full of inventory to need insurance. If you’ve got a few jars of cream and a dream, you’ve got something worth protecting.
Quick checklist: It’s time to get covered if…
- You sell anything that touches skin (lotions, balms, scrubs, soaps, etc.)
- You make or white-label your own formulas
- You sell over $500 per year
- You want to grow onto platforms like Amazon, retail stores, or subscription boxes
- You sell at local events, pop-ups, markets, or expos
If even one of these applies to you, it’s time to get beauty product insurance. It’s not about expecting the worst. It’s about building your best future — covered, confident, and ready to grow.
How Much Does Beauty Product Liability Insurance Cost?
When you’re starting or scaling your beauty brand, every dollar counts. Luckily, you don’t need a big budget to protect yourself, either. So let’s talk about real numbers.
On average, most Insurance Canopy policyholders pay between $1,250 and $2,486 per year for beauty product insurance. This protects their business from legal fees, allergic reaction claims, platform suspensions, and more.
So, what affects your cost?
Just like everyone’s skincare routine is different, so is your policy. Here’s what goes into the cost:
- What you sell: A handmade lip balm is not the same as a chemical peel. Riskier products come with higher premiums.
- How much you sell: More sales mean more potential claims. (Good for growth, just needs more coverage!)
- Where you sell it: Selling in-person or through major retailers like Amazon? You may need higher limits.
- Coverage limits and extras: Want to add protection for tools, equipment, or cyber risks? That can increase your premium.
- Retail and platform requirements: Some partners (like Amazon) require specific coverage minimums, which can impact cost.
What Does My Policy Include?
A typical beauty products insurance policy with Insurance Canopy includes:
| Coverage Type | What It Covers | What That Means for You |
|---|---|---|
|
Bodily injury claims |
Injuries caused by product defects (e.g., allergic reactions, burns, rashes) |
If a customer gets hurt using your product, insurance helps cover their medical bills |
|
Property damage claims |
Damage to a customer’s property (e.g., a leaking serum stains their furniture) |
You won’t have to pay out-of-pocket to replace someone’s rug or sofa if your product leaks |
|
Medical expenses |
Attorney costs, court fees, and settlements (even if the claim isn’t your fault) |
You’re protected from expensive lawsuits, whether or not you’re found liable |
|
Legal defense fees |
Hospital or urgent care costs for injuries caused by your product |
Covers immediate medical bills so you’re not stuck footing the entire bill |
|
Wrongful death claims |
If a defective product results in someone’s death |
A rare but serious protection — this helps cover legal and financial fallout in tragic cases |
Bodily injury claims
What It Covers
Injuries caused by product defects (e.g., allergic reactions, burns, rashes)
What That Means for You
If a customer gets hurt using your product, insurance helps cover their medical bills
Property damage claims
What It Covers
Damage to a customer’s property (e.g., a leaking serum stains their furniture)
What That Means for You
You won’t have to pay out-of-pocket to replace someone’s rug or sofa if your product leaks
Medical expenses
What It Covers
Attorney costs, court fees, and settlements (even if the claim isn’t your fault)
What That Means for You
You’re protected from expensive lawsuits, whether or not you’re found liable
Legal defense fees
What It Covers
Hospital or urgent care costs for injuries caused by your product
What That Means for You
Covers immediate medical bills so you’re not stuck footing the entire bill
Wrongful death claims
What It Covers
If a defective product results in someone’s death
What That Means for You
A rare but serious protection — this helps cover legal and financial fallout in tragic cases
In terms of policy limits, most beauty and skincare businesses carry:
- $1 million per occurrence (per claim)
- $2 million aggregate (total coverage per year)
You can customize these limits based on your business needs and platform requirements (like Amazon or retail partners).
Tip: Need a deeper dive into how skincare insurance works? Check out our comprehensive guide to skincare insurance.
What’s Not Covered (Unless You Add It On)
Not everything fits under a standard policy, but you have options with Insurance Canopy. Here’s what usually requires separate or additional coverage:
- Pulling defective or unsafe products from the market (add product recall insurance)
- Employee injuries (you’ll need workers compensation)
- Ingestible products
- Teaching or consulting services (requires professional liability insurance)
- Cyber and data breaches (add cyber liability insurance)
- Delivery vehicle claims (you’ll need commercial auto)
- Tools, inventory, or supplies in transit (requires tools and equipment insurance, also known as inland marine insurance)
- Intellectual property disputes
Getting Covered with Insurance Canopy (It’s Fast + Affordable)
Launching your first product? Expanding into stores? Insurance Canopy helps you stay covered, credible, and ready for what’s next. No hour-long forms. No mystery pricing. Just solid coverage made for beauty businesses.
Here’s how easy it is:
- Apply online in under 10 minutes
- Get your free, no-risk quote in about a day
- No complicated paperwork or back-and-forth
- Customize your coverage based on your product type, platform, and sales goals
- Download proof of insurance instantly once you’re approved
It only takes a few minutes.
Questions About Beauty Product Liability Insurance
Do I need insurance to sell beauty products from home?
Yes. Even if you’re mixing scrubs in your kitchen or labeling balm in your basement, once your product touches someone else’s skin, you’re legally liable for what happens.
Insurance protects you from surprise lawsuits, medical claims, and platform suspensions, no matter where you work.
Will my policy cover allergic reactions or skin issues?
Yes, allergic reactions and common topical issues (like redness, burns, or irritation) are covered, as long as your product is properly labeled and not on the excluded list.
What if I only sell soap or lip balm?
Even simple beauty products can cause real problems. (Ever seen what cinnamon oil can do to sensitive skin?) If your product touches skin or lips, you face liability risk. The good news: policies for low-risk products like soap and balm are usually very affordable.
Is insurance required to sell beauty products on Shopify or Amazon?
Yes, especially on Amazon, where liability insurance is required once your sales hit a certain threshold (currently $10,000 per month). Shopify doesn’t require it, but it’s still a smart move to protect your business, meet marketplace standards, and build trust with customers.
Can I get insurance if I use CBD (Cannabidiol), SPF (Sun Protection Factor), or other essential oils in my beauty products?
Yes, but you must disclose those ingredients during the quote process. Products with CBD, SPF, or high concentrations of essential oils are considered higher risk and may need additional underwriting. It’s still possible; you just need to be upfront and transparent.
