Unless you have a specific contract or lease that requires you have liability insurance, you don't NEED liability insurance - you buy it to protect yourself against potential claims.
Whether you want insurance will depend on what you're selling and how much of a risk you think you'll have of people feeling like they didn't get what they bargained for.
But it's all up to you to decide how much risk you are willing to take.
You don't tug on Superman's cape; you don't spit into the wind; you don't pull the mask off the old Lone Ranger; And you don't get legal advice from a free Q&A page on the Internet. The above is a general statement of the law or just my opinion. I am not saying whether it applies to your situation or not because I don't know the details and youâ€™ve not hired me as your attorney.
"Necessary" is a funny word.
Do yo mean "necessary because it is a legal requirement?" You will be doing business interstate, and perhaps internationally. You could possibly be sued in each and every one of those states.
Do you mean "necessary as the only was to avoid personal liability?" You don't say how or where your business is set up. A corporation, properly established, will shield you from personal liability.
You should contact an insurance agent after talking to your business attorney and then you'll know the legal obligations, and the different insurance products out there.
You should know that this answer does not establish an attorney-client relationship. To do so would require a written agreement between us. You should be aware that there are time limits within which you must pursue any claim or suit.
A lot depends on what you plan to sell, plaintiff's attorneys are very resourceful. I would need some more information to provide better information. But General (Commercial) Liability Insurance would not be a bad thing to consider once you have identified what products or discounts you are going to launch. I guess the scenario I see is that you sell something discounted, liability occurs and you get named as a defendant, if somebody doesn't perform they could look to you for recourse, because they paid you. You may want to consult with a few insurers about any potential risks or think of "risk possibilities" and work from their.
Legal disclaimer: I am not your attorney and we have no attorney/client relationship. This response is submitted for informational purposes only. This is not legal advice, nor is it intended to be taken as such. Anyone considering the above referenced situation should always consult an attorney within the jurisdiction before taking any action based on this, or any other information.
Consult an insurance broker and seek advise based on your personal and business profile. Insurance covers risks. We don't know what can you be exposed to and for what. Get as much insurance and of any kind you can.
In general, there is no California law that requires you to purchase insurance for your e commerce business. There are several other reasons that you need e-commerce insurance. First, depending on how you conduct business, (sole proprietor, corporation or LLC) will determine your level of personal liability for any claims against your business. If you are a sole proprietor, any claims from your clients are on you personally to resolve. Second, if you ever have a supply contract, lease or other business relationship, your client(s) or vendor(s) may require you to carry minimum levels of insurance for the business relationship. As a general rule of business practice, I always recommend that you carry insurance as soon as you can afford it.
Fine Print: There are always other factors to consider and this message can not be relied upon to create an attorney client relationship or as legal advise because all of the related matters have not been disclosed.
PS You do want to get a business license from the City of Irvine even though your business is an e commerce business.
Best Wishes -
This information is general and will change according to your facts. While this information may apply to your situation, without more facts I can not encourage you to rely on this information. I am not your attorney. No attorney client relationship exists. You should hire an attorney for your specific business matters.