E-commerce Product Liability Isn’t Just for Amazon: How Small Distributors Are Getting Sued Too

When people think of e-commerce lawsuits, they usually picture big names like Amazon being dragged into court. But the reality is that small and mid-sized online sellers, drop shippers, and niche distributors are increasingly facing product liability claims too. If you run an online store, you may be more exposed than you think.

As a business litigation firm in Florida, we’ve seen firsthand how these cases unfold and how devastating they can be for smaller operations. Below, we break down what you need to know.

What Is Product Liability in E-commerce?

Product liability means that if a product sold through your business injures someone, you could be held legally responsible. This doesn’t just apply to the manufacturer. In today’s e-commerce ecosystem, anyone in the supply chain, including small distributors, third-party sellers, or even fulfillment companies, may be pulled into a lawsuit.

For example, if a consumer buys a defective phone charger through your Shopify store and it causes a fire, you could face a claim even if you didn’t manufacture the charger.

Why Small Distributors Are Being Targeted

Plaintiffs’ attorneys don’t just go after big corporations. They often look for anyone connected to the sale, especially if:

• The manufacturer is overseas or hard to reach in U.S. courts.
• Your company’s name appears on the product listing, invoice, or packaging.
• You marketed or described the product in a way that could be seen as creating trust or assurances.

In short, even if you didn’t design or build the product, if you played a role in selling it, you may be held responsible.

Are Online Marketplaces Like Amazon Shielding Sellers?

Amazon has famously argued that it is only a platform, not a seller. While courts are still divided, recent cases have held Amazon can be liable in some circumstances. But here’s the catch, just because Amazon may share some liability doesn’t mean you’re off the hook.

If you’re a small distributor using Amazon, Etsy, or eBay, plaintiffs can (and often do) file claims against both Amazon and the individual seller. That means your business could be dragged into litigation right alongside a billion-dollar corporation.

What Types of Products Trigger Lawsuits Most Often?

Some product categories see more claims than others. Based on trends, small distributors should be especially cautious when selling:

• Electronics (chargers, batteries, hoverboards, scooters)
• Children’s products (toys, furniture, strollers)
• Household goods (kitchen appliances, cleaning products)
• Health and beauty items (supplements, cosmetics, skincare devices)

Even inexpensive products can lead to lawsuits if they cause injury or property damage.

How Can Small E-commerce Businesses Protect Themselves?

The good news is that with careful planning, you can significantly reduce your risks. Here are some key steps:

1. Contracts With Manufacturers: Make sure your supplier agreements include indemnification clauses that protect you if their product causes harm.
2. Business Structure Matters: Operating as an LLC or corporation (rather than as a sole proprietor) creates a liability shield that can protect your personal assets.
3. Insurance Coverage: Product liability insurance is no longer optional, it’s a must. Many e-commerce platforms now require sellers to carry it.
4. Clear Warnings and Disclosures: The way you describe and market your products matters. Over-promising safety or performance can increase liability.
5. Consult a Business Litigation Attorney: Every e-commerce model is different. A tailored risk assessment from an experienced attorney can prevent costly mistakes later.

What to Do If Your E-commerce Business Gets Sued

If you’ve been served with a lawsuit, don’t ignore it. Even small claims can spiral quickly into expensive litigation. Your first step should be to contact an attorney who understands both business litigation and product liability. Acting quickly gives you the best chance to resolve the matter efficiently.

Need Help Protecting Your E-commerce Business?

Product liability isn’t just a “big company problem.” If you run an e-commerce store, whether you’re a one-person operation or a growing distributor, you need to take these risks seriously. The cost of defending a lawsuit can be devastating, but with the right protections in place, your business can grow without putting your livelihood on the line.

If you sell products online, don’t wait until a lawsuit happens to think about liability, contact one of our experienced business litigation attorneys in Miami at 305-570-2208.

You can also email our founding attorney, Eduardo A. Maura, Esq., directly at eduardo@ayalalawpa.com.

Or, schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case.]