Most Amazon sellers don’t know they need to have insurance when they start their sales. They are not even aware of what insurance is and what it does on Amazon. In this article, we will try to explain why Amazon insurance is necessary and what it does. If you sell a product to your consumer and it damages property or injures the buyer, you need insurance to protect yourself from liability. Basically, the need for insurance arises for this reason. If you sell on Amazon, you need to treat it like any other business, and part of that is having proper insurance to protect yourself and your business. Before getting detailed information about insurance requirements on Amazon, you can read our article here, where we tell you what you need to know before creating the best-selling packages, namely bundles.
Why Do You Need Insurance To Sell On Amazon?
If you’re like many new or experienced sellers, you probably haven’t realized that Amazon requires you to take out product liability insurance at some point. “If something goes wrong, Amazon will have my back, right?” You may be thinking. False. Amazon doesn’t want liability and as a business owner and Amazon seller it’s up to you to have proper insurance. The reason behind this rule is very simple: to protect yourself / your company’s assets and meet any financial liability arising from accidents, injuries or lawsuits. As your business grows, your responsibility will increase. Whether you are a reseller or sell your products, you need Amazon seller insurance to protect your business. You may even have heard of the woman pouring hot coffee on her lap and making tons of money against a coffee company because of a lawsuit, so if you have proper liability insurance or marketplace protection for your Amazon business, the insurance company will fight for you on litigation. While the chances of a customer suing you are slim, it’s better to act cautiously and follow Amazon’s rules.
Amazon’s Insurance Requirements
It is somewhat unclear where to find information about Amazon’s insurance requirements on Seller Central. However, on the Program Policy help page, Amazon lists a number of policies that you must follow as a seller.
Pro Merchant Insurance Requirements
Amazon explains these requirements in the Program Policy as follows: “” Professional Sellers selling on Amazon must provide proof of Commercial General Liability insurance. This insurance, at the seller expense, will cover up to $ 1,000,000 per incident and in total and must include product liability, bodily injury or personal injury, property damage, and other requirements outlined in the Amazon Services Business Solutions Agreement. Insurance should state that “Amazon.com, Inc. and its affiliates and agents” are added as additional insured. “
Other requirements are explained as follows in the above mentioned “Amazon Services Business Solutions Agreement”; “” If the gross income from your transactions exceeds the Insurance Threshold applicable each month for any period of three (3) consecutive months, or if otherwise requested by us, within the next thirty (30) days, you will be at your expense Any applicable Selected Country commercial general insurance, umbrella or excess liability insurance for the remainder of the term of insurance or excess liability insurance, which includes Insurance Limits for each incident and liabilities arising from or in connection with the operation of your business, including products, products / completed transactions, and policy naming Amazon and its agents as additional insured bodily injury. At our request, you will provide us with insurance certificates to the following address: Amazon, PO Box 81226, Seattle, WA 98108-1226,”
Where to Get Insurance
It is quite simple to apply for Commercial General Liability, Umbrella and / or Extreme Liability Insurance coverage. Please contact Wells Fargo, Progressive, Geico etc. to get a quote. It is enough to contact insurance companies such as. Your offer will be based on your estimated annual income, as product liability insurance is largely required. The average cost is typically around $ 500-1,000 per year.
When you apply for liability insurance, let the company know everything about your job and what your product does. For example, you are a private label seller where your product has been manufactured abroad. You are considered a manufacturer and have an enormous product responsibility. This may not be the same for the retail arbitrage retailer. Besides the business model, your representative should be familiar with Amazon FBA and FBM. If not, make sure you find someone with sufficient knowledge about the Amazon marketplace.
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