Insurance for Amazon Sellers

August 4, 2022
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While these digital retailers are an ideal way to reach a larger market, an increase in sales also means an increase in liability. If a business is booming, it is time to acquire product liability insurance. 

Do I need insurance to sell on Amazon?

Yes. Effective September 1, 2021, Amazon requires all sellers earning $10,000 or more in monthly sales to have commercial liability insurance, whether you use Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Amazon’s insurance requirements include:

  • A policy with a limit of at least $1 million per occurrence and in aggregate covers liabilities caused by or occurring in conjunction with your business operations, including products, property damage, and bodily injury.
  • Any deductible must not exceed $10,000
  • Name Amazon as an “additional insured” under your policy

What type of insurance do I need to sell on Amazon?

Amazon requires that sellers receive coverage for Product Liability as well as Commercial General Liability for their business. Depending on the nature of your business (i.e. if you import goods from another country) you may consider purchasing additional coverage. An insurance broker can review your business and assess the best coverage for your needs.

What is Product Liability insurance?

Oftentimes, product liability insurance is covered under commercial general liability. Depending on the nature of your business, you may require a higher limit and an additional agreement. A product liability policy will protect you and your company against claims of third-party bodily injury or property damage caused by products you manufacture or sell.

What is Commercial General Liability insurance?

In the event of property damage or bodily harm caused by you, your business ,or your employees to a third party, a comprehensive Commercial General Liability Insurance policy should protect you from litigation, out-of-court settlements, and judgments awarded by the courts.

Are there other types of coverage I should consider if I sell on Amazon?

You may consider cyber liability insurance and commercial property insurance coverage. Speak with your insurance broker to learn more about if these types of insurance coverages apply to your business.

How much Amazon seller insurance do I need?

As all businesses are unique, there is no one-size-fits-all answer. Depending on your business operations (i.e. if you have a warehouse, make your products vs. importing them, your location,etc.) your insurance needs will vary. In any case, it is always best to speak with an insurance broker to determine the best coverage for your specific needs.

Can you provide insurance coverage for sellers on other eCommerce sites?

Yes, we can provide coverage for your products on various eCommerce sites like eBay, Shopify, Etsy, etc.

Amazon pays for claims under $1,000, saving sellers time and money

Amazon will resolve and pay for valid property damage and personal injury claims against sellers under $1,000 as a concession to customers. Claims under $1,000 account for more than 80% of cases in our store, and Amazon will bear these costs and not seek reimbursement from sellers who abide by our policies and hold valid insurance. Sellers will be kept informed at every step so they can continue to ensure their products are safe.

Read more about Amazon’s A-to-Z guarantee and how this impacts buyers and sellers. More questions about getting your direct to consumer biz protected? Connect with your local Gifford Carr broker. We’ll help get you protected so it’s a smooth checkout on your e-store. Get a quote today!

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