Running an e-commerce business from Pennsylvania might feel like you're operating in a regulatory gray area—after all, your customers are scattered across the country, you might not even have a physical storefront, and your "warehouse" could be your garage. But here's the reality: Pennsylvania treats online businesses the same as brick-and-mortar stores when it comes to insurance requirements. And if you're selling on major platforms like Amazon or Walmart, you've got even more requirements to meet before you can start moving inventory.
The good news? Pennsylvania doesn't require a general business license, which simplifies things. The challenging news? You'll still need specific insurance policies and licenses depending on whether you have employees, where you store inventory, and which marketplaces you sell through. Let's break down exactly what you need to legally operate your e-commerce business in the Keystone State.
What Pennsylvania Law Actually Requires
Pennsylvania is pretty straightforward about mandatory insurance, but it's also one of the strictest states when it comes to enforcement. If you have employees—even one part-time customer service rep working remotely—you must carry workers' compensation insurance. This isn't a "once you hit 5 employees" situation like in some states. In Pennsylvania, it's from day one of your first hire.
Workers' compensation covers medical expenses and lost wages if an employee gets injured on the job. For e-commerce businesses, this might be a warehouse worker who strains their back lifting boxes, or even an office employee who trips over cables while photographing products. As of January 2025, Pennsylvania's wage loss benefits max out at $1,347 per week, which is generally two-thirds of the employee's weekly earnings. Skip this coverage and you're looking at fines up to $15,000, potential felony charges, and stop-work orders that can shut down your entire operation.
If you use vehicles for your business—whether you're running products to the post office or making local deliveries—you'll need commercial auto insurance. Pennsylvania requires minimum coverage of $15,000 per person and $30,000 per accident for bodily injury, plus $5,000 for property damage. Your personal auto policy won't cut it once you're using the vehicle for business purposes.
General liability insurance isn't required by Pennsylvania state law for most businesses. But before you skip it, understand that you'll probably need it anyway. If you rent warehouse space, your landlord will require it. If you work with wholesale suppliers or manufacturers, many will demand proof of coverage. And if you're selling on Amazon or Walmart, there's no wiggle room—you must have general liability insurance to meet their seller requirements.
Marketplace Requirements You Can't Ignore
Here's where things get interesting for e-commerce sellers. Even if Pennsylvania doesn't legally require certain insurance types, the platforms you sell on absolutely do. Amazon and Walmart both require general liability insurance once you hit certain sales thresholds, and they're specific about coverage limits.
Amazon typically requires $1 million per occurrence in general liability coverage. Walmart wants $1 million per occurrence and $2 million in aggregate. Your policy needs to list the marketplace as an additional insured—and yes, they want their legal name spelled out exactly right: "Amazon.com, Inc., and its affiliates and assignees" or "Walmart Inc., its subsidiaries and its affiliates." Get this wrong and your application gets rejected.
Product liability insurance is the coverage that keeps e-commerce sellers up at night, and for good reason. If you sell a product that causes injury or property damage—even if you didn't manufacture it—you can be held liable. This is the most critical coverage for online sellers because your exposure is potentially massive. A defective phone charger that starts a house fire, a children's toy with a choking hazard, a skin care product that causes an allergic reaction—these are all scenarios where you're on the hook, even if you're just the middleman between the manufacturer and the customer.
The Coverage You Don't Think About Until It's Too Late
Cyber liability insurance isn't legally required in Pennsylvania, but if you're running an e-commerce business in 2025 without it, you're playing Russian roulette with your business. Every time a customer enters their credit card information on your site, you're holding data that hackers want. Every customer email address in your database is a potential breach liability.
Cyber liability insurance covers the aftermath of data breaches, ransomware attacks, and stolen customer information. This includes notification costs (you have to tell affected customers), credit monitoring services, legal defense, regulatory fines, and the costs of getting your systems back online. For e-commerce businesses handling payment information and personal data, this coverage is essentially mandatory from a practical standpoint, even if Pennsylvania law doesn't require it.
Business interruption insurance is another coverage that most new e-commerce sellers overlook. This covers lost income if your business has to shut down temporarily due to a covered event—think fire at your warehouse, severe weather that prevents shipping, or a cyber attack that takes down your website. For small e-commerce operations where a week offline could mean missing rent, this coverage can be the difference between a temporary setback and closing up shop permanently.
Pennsylvania Licensing for E-commerce Sellers
Pennsylvania keeps licensing simple for e-commerce businesses. You don't need a general business license to operate in the state. What you do need is a sales tax license if you're selling taxable products to Pennsylvania residents. This isn't optional—if you're delivering taxable items to locations in Pennsylvania, you must collect and remit sales tax.
Getting your sales tax license is straightforward. You file through Pennsylvania's myPATH portal using form PA-100. Once you have this license, you can also claim sales tax exemptions on products you purchase for resale by completing form REV-1220 and providing it to your suppliers. This keeps you from paying sales tax twice on the same merchandise.
Beyond the sales tax license, Pennsylvania doesn't impose additional state-level requirements for basic e-commerce operations. However, some cities including Philadelphia and Pittsburgh may require business licenses or permits depending on your location and activities. If you're operating from a specific municipality, check with your local government to ensure compliance.
Getting Your Coverage Right
Most Pennsylvania e-commerce businesses should carry between $500,000 and $1 million in general liability coverage as a baseline. If you're high-volume or selling products with higher risk profiles, increase that coverage accordingly. The average cost for general liability insurance in Pennsylvania runs about $42 per month, though your actual premium depends on your revenue, products sold, and claims history.
When shopping for insurance, make sure your business name appears exactly as shown on your seller accounts and business registration. Discrepancies can cause claim denials or marketplace rejections. Get certificates of insurance that specifically list required parties as additional insureds—this is non-negotiable for marketplace sellers.
Ready to get your e-commerce business properly protected? Start by getting your sales tax license through myPATH if you haven't already. Then talk to an insurance agent who understands e-commerce operations—generic business insurance packages often miss critical coverage gaps that online sellers face. Compare quotes from multiple carriers, and don't just shop on price. The cheapest policy is worthless if it doesn't cover the specific risks your business faces. Get the right coverage now, before you need it, and you'll sleep better knowing your Pennsylvania e-commerce business is built on a solid foundation.
