Insurance and drop shipping

by Beets
7 replies
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Hi warrior forum people. Noob here looking for a clue.

I want to start drop shipping computer parts and I want to buy the right insurance.

If I drop ship a faulty product then what sort of insurance would protect me and my customers?
Product Liability Insurance sounds right to me, but IDK.

Also is drop shipping computer parts a good idea?

Thanks!
#drop #insurance #shipping
  • Profile picture of the author Monetize
    It seems that you are overcomplicating this dropship plan of yours.
    Who told you that you need this type of insurance, and how do you
    plan to be profitable if you will incur all these additional expenses?
    I am pretty sure that if your customer were to receive a defective
    item they would be able to return it to the factory/distributor for an
    exchange or refund.

    Is it a good idea?

    You need to decide that for yourself.
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  • Profile picture of the author agmccall
    If your dropshipper ships a faulty product then they should be responsible for replacing product. If customer just wants a refund then you give them a refund. It will cost more for insurance than it would to just handle customer issues on your own.

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  • Profile picture of the author Clintin
    Product Liability Insurance would be the correct insurance to get if you fear that you may get sued or customer take action towards you for your dropshipper shipping a faulty product that may cause damage to someone's property.

    Since you're in computer parts here is an example, you ship out a CPU but the CPU is faulty so when the customer installs the CPU in their PC, it destroys the Motherboard. In this example, Product Liability could protect your business if the customer decides to take any kind of action. Of course you will need to talk to insurance companies for the best insurance for you business.

    However, if your business is under an LLC or Corporation, then they will most likely go after your business and not you personally. I have Product Liability Insurance but that is because I sell a product that people will consume.

    "It's better to have it and not need it, then to need it and not have it"
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  • Profile picture of the author Hamza Awan
    Using the drop shipping service or even the freight forwarding service because some companies like Global Shopaholics offer the cheapest shipping rates along with the free US address, and another one like myUS, offer 30 days free storage as well. so this is quite beneficial.
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  • Profile picture of the author dave_hermansen
    Look, I'm certainly no lawyer, but this is really no different than a brick and mortar business. When Big Tobacco was sued, did the lawsuit also include all of the retail stores that sold cigarettes? No.

    Have you ever heard of the Walmarts of the world or the individual car dealership that sold a car that turned out to be dangerous (or worse) get sued? Nope.

    The manufacturer is the only one responsible for ensuring their products are safe.

    Now, if you knowingly sell something that is harmful - something that has been recalled or that a government agency has banned, that's another story. If something has been recalled, stop selling it the moment you are notified.

    We've never seen the need for such a policy with the more than 150 websites we built, but if you want to get an umbrella policy to make yourself feel better, that's fine. It may not hurt to put something in your store policies that also state that customers are free to make their own choices and those choices are solely theirs - that the website is not responsible for any harm that may come from the products on the site.

    Your only legal responsibility is to make sure that you are not knowingly selling something that is harmful. If you are in an iffy market (e.g. air guns, e-cigarettes), you may want to protect yourself further. If you are selling baby strollers, bicycles or Teddy bears, you should be just fine with nothing at all.
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    • Profile picture of the author DWolfe
      Originally Posted by dave_hermansen View Post

      Look, I'm certainly no lawyer, but this is really no different than a brick and mortar business. When Big Tobacco was sued, did the lawsuit also include all of the retail stores that sold cigarettes? No.

      Have you ever heard of the Walmarts of the world or the individual car dealership that sold a car that turned out to be dangerous (or worse) get sued? Nope.

      The manufacturer is the only one responsible for ensuring their products are safe.
      To some it up another way the Lawyers go after the ones with the deepest pockets.
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      • Profile picture of the author dave_hermansen
        Originally Posted by DWolfe View Post

        To some it up another way the Lawyers go after the ones with the deepest pockets.
        Well, if that was all there was to it, you'd certainly see a slew of lawsuits against Walmart and certainly against Amazon any time a product they once sold was involved in a lawsuit. It just doesn't happen because the retailer is not the one who made the faulty product. The retailer is no more responsible than the person who bought the product is.
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        We help sellers get the MAXIMUM amount for their websites and all buyers know that these sites are 100% vetted.
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