Has this ever happened to you?
One month, your business insurance is stable. The next, your premium doubles, your coverage disappears, or Amazon won’t accept your Certificate of Insurance (COI).
You’re not imagining it. Many product-based businesses have the same troubles with insurance that seemed like a great deal at first. Here’s the good news: the problem isn’t you. Some online insurers have pulled back from key product categories, misclassified businesses, or applied automated renewals that spike prices overnight.
At Insurance Canopy, we help small businesses get back to stable coverage. We analyzed almost 16,000 reviews across the industry and conversations with product businesses like yours to uncover the four most common product liability insurance problems you face.
This guide breaks down each issue, why it happens, and how our approach keeps you covered, compliant, and confident. Do you see yourself in any of these real customer questions?
Challenge #1: Skyrocketing Premiums at Renewal Time
“Why did my insurance premium double overnight?”
We hear stories like these on repeat from product business owners looking to switch insurance providers. Premiums that balloon 50% to 100% when it’s time to renew are all too common, usually with no clear explanation.
Why It Happens
Sudden price spikes at renewal sometimes have more to do with the insurer than they do with you. When we investigate what happened, here are some of the typical reasons:
- Automated underwriting systems: Some online insurers automatically re-score your business every year without human review. This can lead to mistakes in your coverage or sudden price hikes without notice, even when nothing has changed on your end.
- Category appetite changes: Some carriers may decide to invest less heavily in higher-risk products or business types without communicating that to you. That means they’re not concerned about losing your business with sudden price spikes.
- Misclassification: If you were priced for insurance in the wrong business category, you may have previously been receiving a lower price (and coverage with serious gaps) without realizing it. More on this later.
The Insurance Canopy Difference
Insurance Canopy prices for predictability. We know you need time to consider how your premiums fit into your budget and affordable coverage you can count on. Here’s how we make it happen
- Every renewal is reviewed by a real underwriting team, not just an algorithm
- Our goal is to change your price as little as possible
- We don’t increase rates often, but if we do, we always give 30 days’ notice, at a minimum
- Your notice will include an explanation of why the change is happening, so there are no surprises
- Our customer service team is here to answer your questions and provide transparency other online insurers can lack
No matter who you choose to protect your business, looking for these qualities in an insurance company helps you find stable coverage with reliable renewal pricing.
Challenge #2: Product Category Drops and Coverage Gaps
My insurer suddenly stopped covering my product type. What do I do?
Many carriers scale back coverage for business categories that are hard to place with a carrier (usually because they’re risky, highly regulated, or don’t have much demand). That leaves honest businesses stranded mid-term or scrambling at renewal to find coverage and stay compliant.
Why It Happens
Focusing on fast growth and automation leads some insurance providers to sell more niche-category policies than they truly want to cover. When claims or regulations appear, they quickly eliminate the risk by dropping whole categories. The result: you, stuck with no coverage for doing absolutely nothing wrong.
The Insurance Canopy Difference
We don’t chase trends. Instead, Insurance Canopy commits to the categories we serve in these ways:
- We specialize in niche business categories other insurers avoid, so everyone can access safe, reliable coverage designed to fit them
- We choose underwriting partners based on their stability and specialization in the categories we support
Here are some dropped categories we’ve heard about from customers switching to Insurance Canopy recently (and a breakdown of how we keep you consistently protected).
| Product Category | Industry Change | Insurance Canopy Response |
|---|---|---|
|
E-bikes / electric scooters |
Declining interest in offering coverage due to road-related risks
|
Continues to offer coverage through approved markets
|
|
Firearms / custom engraving
|
Decreased interest in coverage due to firearm-related risk
|
Maintains coverage via qualified specialty carriers
|
|
CBD / hemp / cannabis |
Recent cannabis non-renewal patterns and price increases in several states since 2024 |
Offers compliant cannabis coverage |
|
Chemicals / raw materials
|
Increased non-renewals in 2025 due to misclassification issues
|
Takes the time to categorize policies for distributors, importers, and resellers correctly
|
|
Supplements / herbal remedies
|
Inconsistent availability due to supplement regulation challenges and a trend to exclude coverage |
Provides vitamin and dietary supplement insurance tailored to your unique risks |
|
Children’s products / toys
|
Heightened compliance scrutiny after 2024 toy regulation updates |
Continues covering compliant, safety-verified kids’ products
|
E-bikes / electric scooters
Industry Change
Declining interest in offering coverage due to road-related risks
Insurance Canopy Response
Continues to offer coverage through approved markets
Firearms / custom engraving
Industry Change
Decreased interest in coverage due to firearm-related risk
Insurance Canopy Response
Maintains coverage via qualified specialty carriers
CBD / hemp / cannabis
Industry Change
Recent cannabis non-renewal patterns and price increases in several states since 2024
Insurance Canopy Response
Offers compliant cannabis coverage
Chemicals / raw materials
Industry Change
Increased non-renewals in 2025 due to misclassification issues
Insurance Canopy Response
Takes the time to categorize policies for distributors, importers, and resellers correctly
Supplements / herbal remedies
Industry Change
Inconsistent availability due to supplement regulation challenges and a trend to exclude coverage
Insurance Canopy Response
Provides vitamin and dietary supplement insurance tailored to your unique risks
Children’s products / toys
Industry Change
Heightened compliance scrutiny after 2024 toy regulation updates
Insurance Canopy Response
Continues covering compliant, safety-verified kids’ products
Challenge #3: COI Rejections from Amazon and Other Retailers
“Amazon keeps rejecting my certificate! I’m losing sales.”
Nothing stings quite like seeing “Your COI was rejected” when you’re fighting to keep your retail listings live. Across thousands of calls, emails, and reviews, COI issues rank among the top reasons sellers seek new insurance.
And it’s not hard to see why: writing a compliant, complete COI is your insurer’s responsibility.
Why It Happens
Retail marketplaces like Walmart and Amazon have specific COI requirements that many miss with these common mistakes:
- “Amazon.com Services LLC and affiliates” missing from the Additional Insured line
- Deductible not displayed
- Using a claims-made form instead of an occurrence form
- Missing a 30-day cancellation notice
The Insurance Canopy Difference
Knowing great products is your job. Writing compliant COIs is ours. Insurance Canopy COIs are built to pass marketplace checks the first time. We have over 10 years of experience in Amazon Sellers Insurance and Etsy Sellers Insurance, along with Ecommerce Insurance for any major retail marketplace, so we know exactly what your COI needs:
- Amazon-compliant wording is included automatically
- Deductible is shown clearly
- 30-day cancellation notice is included
- Sent electronically for same-day use
Skip the re-uploads and lost sales with coverage that’s designed to work when you need it.
Challenge #4: Being Misclassified as the Wrong Type of Business
“Why does my policy list me as a manufacturer when I’m just an importer?”
“They quoted me in the wrong category, then canceled me later for it. But it was their mistake!”
Misclassification is surprisingly (and worryingly) common for manufacturing, importing, private-labeling, and retail businesses. And this small error causes big problems.
Not only may you suddenly lose coverage when an error is discovered, but you were likely underinsured (and at serious risk in the event of a lawsuit) or overinsured (and paying too much) that whole time.
Why It Happens
Many quick-quote systems from online insurers oversimplify their applications to make them user-friendly. Here’s a common scenario. You’re asked:
“Do you manufacture products?”
If you don’t physically build them, you probably checked “No.” (We don’t blame you; that’s unintentionally a very tricky question.)
Here’s the short version: in insurance terms, importing or private labeling counts as manufacturing because you take on the same risk once a product enters the United States. Product liability law often holds the importer responsible rather than the overseas manufacturer, which means you’re first in line if a product recall or defect lawsuit is filed.
That small checkbox mistake makes quotes look cheaper upfront — until your insurer’s underwriting realizes the true risk later. Then come the cancellations or non-renewals.
The Insurance Canopy Difference
We built our online insurance application to be quick and easy while classifying your business correctly as a manufacturer, importer, distributor, or retailer.
Here’s how we make sure your coverage fits how you actually operate:
- We explain what each classification means in plain language
- We ensure coverage reflects your true liability
- We prevent coverage gaps or mid-term cancellations by classifying you correctly the first time
Correct classification equals correct protection, so we balance a fast, simple online process with clarity, transparency about your risks, and thoroughness in understanding what you do.
Overcoming the Frustrations of Switching Insurance
At this point, we bet you probably have some questions and reservations about how to move forward, and you’re smart to be cautious. Here are some common questions around seeking out better coverage, and how we can help.
“Is Switching Insurers Worth It?”
If you’re coming from a policy that’s been unpredictable, you might hesitate to move again. Change sounds risky when you’ve been burned before, but staying with an unreliable insurer can be even riskier.
With Insurance Canopy:
- Quotes are quick and transparent
- Renewals are stable and communicated early
- COIs are marketplace-ready from day one
- Classifications are assigned with thoroughness and care
Switching doesn’t have to be stressful. We make it simple so you can focus on what you actually care about — your business.
“I’m Having Trouble Finding a Human to Talk to at My Insurance Company.”
Too often, customers tell us they were left in voicemail loops and email queues or stuck with a chatbot when they needed help most (like during a claim, renewal, or cancellation).
With Insurance Canopy:
- Every business has access to real customer service agents. Call or email us from 8 a.m. to 8 p.m. ET, Monday through Friday, and a friendly, U.S.-based, licensed agent will be happy to help you.
- We believe in proactive, human support, not automation alone. A chatbot is great for answering a quick question, but you need a human solution when you have a complex problem.
- Our team checks in before renewals, answers coverage questions directly, and keeps you informed every step of the way.
We’re sorry you’re stuck in that feedback loop with your current insurer, and we know it’s annoying. But once you’re finally out, Insurance Canopy makes sure you never have to go back.
“Is It Expensive to Switch Insurance, or Will It Take a Long Time?”
Once you’re ready to start a new application, we can typically get you insured within 24 hours (or less) with an affordable, tailored policy.
With Insurance Canopy:
- You can fill out an application in minutes online for many business types.
- Product-based businesses can usually get a custom quote within 24 hours.
- Your pricing is designed for predictability, so what you see on your quote is what you pay. Plus, we still make our prices affordable and competitive. For example:
- Most online sellers pay $116 per month or less with Insurance Canopy.
- The cost of manufacturing insurance and distributors insurance typically ranges from $700 to $3,000 per year for small to mid-sized businesses.
So yes, you can expect the switching process to be fast with a specialist insurer who gets your needs. Plus, switching can be affordable (and worth it in the long run).
Pro tip: Check your current policy for cancellation fees or bundled coverages to budget out the switch. We make the process as easy as possible, but we get that this is a commitment for you. We’ll be here with more reliable coverage when you’re ready.
We’ve Solved These Problems for Thousands of Businesses
If you’re exhausted by the back and forth, know that these problems are not how coverage is supposed to work. You deserve stability, transparency, and an insurer who gets what you do.
At Insurance Canopy, we build our product liability insurance programs around the promise of dependable coverage. We’ve helped thousands of sellers, makers, and importers get back to business without worrying about insurance chaos, and we can do the same for you.
Get a quick, no-pressure quote and see how simple securing reliable protection can be.
FAQs About Common Product Liability Insurance Problems
What affects the cost of manufacturer and importer insurance?
The cost of your manufacturer or importer insurance depends on a few key factors:
- The type of product you manufacture or import (higher-risk items usually cost more)
- Your annual sales volume, revenue, and number of units sold
- Your business’ past claims history
- The business role you play in the supply chain (importing, manufacturing, distributing, or retailing)
- The coverage limits you choose, and any add-on coverages or endorsements you add
For manufacturers and importers, the real question isn’t just “what’s the cheapest product liability insurance?”, it’s “am I being priced accurately for my actual risks?”
What’s the difference between importer vs. manufacturer liability insurance?
Importers bring products into a country from overseas, labeling or repackaging them, and distributing them. Manufacturers design, make, assemble, or alter products for sale.
If you import or private-label goods or place them into the U.S. supply chain, you may legally be treated like a manufacturer when it comes to liability. Once the product enters the market in the States, you’ve assumed responsibility for it. As a result, importer insurance and manufacturing insurance may be priced similarly and have similar coverages.
Why would an insurer suddenly exclude my product category or stop covering it?
Insurers may change their “appetite” (which products they’ll cover) when the risk of claims increases for a certain type of product. For example, if a product is facing greater regulatory requirements. When that happens, they may stop writing new business policies in that category or decide not to renew existing policies.
JoAnne Hammer | Insurance Canopy Program Manager, Certified Insurance Counselor
JoAnne’s 29 years of industry experience make her unmatched in the small business insurance space. She reviewed this page and gave it her stamp of approval so you can know it’s certified by a pro.
