re: "I am considering to hire a freelancer from Upwork to do a job for me (website for selling digital goods)."
An excellent choice, indeed.
Except you should not hire one freelancer.
You should hire multiple freelancers for a project of this size and complexity.
If you hire only one, how will you compare his work to the other freelancers on the team, to see who is providing you with the most value?
re: "Since I don't have technical knowledge on this I am a bit afraid of not having a good overview on possible technical issues, for example on the sale system."
Before you get started on the project, you should hire four different freelancers using job postings that specifically state that they will not do any work. They will just talk to you about the project, about strategies for accomplishing your goals, etc. You will hire them using hourly contracts. You will talk to them for between about 30 minutes to an hour each.
re: "Is the client somehow covered by upwork in case there would be technical problems that can damage the business (for example clients asking to be refunded if they don't receive the digital goods in a correct way)."
No.
Absolutely not.
Client is not covered by Upwork.
re: "Is there a sort of insurance?"
No.
re: "Or how would it work?"
I can assure you that it is not Upwork's responsibility to make sure that your project works.
It is also not the responsibility of the lead developer that you hire, nor is it the responsibility of any of the other individual developers who you hire.
If you are the client, and you hire one or multiple freelancers to create a website for you, then it is your responsibility to ensure that the project succeeds.
You do not have sufficient knowledge and experience to succeed in this endeavor.
You will need to hire an independent project manager.
It will be her responsibility to make sure that the project succeeds.
That is what a project manager does.
If your project is simple enough, it IS possible for you to proceed WITHOUT a project manager. If you don't hire a project manager and you don't know how to act as project manager, then it means the lead developer is the de facto project manager. About 20% of lead developers ARE ABLE to act as project manager. So if you don't hire an independent project manager, it mens you will have a 20% chance of your project succeeding.
