If you’re an Amazon seller, you may be wondering about the insurance requirements for your business. Amazon requires sellers to have liability coverage for their products, and there are specific requirements that must be met for Pro Merchants. You’ll need $1 million in liability coverage per occurrence and in aggregate to meet Amazon’s seller insurance requirements. Your policy must include coverage for products liability, products/complete operations, bodily injury, personal injury, and broad form property damage.
In addition to liability coverage, Amazon also requires sellers to obtain and maintain commercial liability insurance within 30 days after exceeding $10,000 in gross proceeds in sales in one month on Amazon.com. This requirement is outlined in section 9 of the Amazon Services Business Solutions Agreement. If you’re a Professional Seller who makes more than $10,000 in sales per month, you’re now required to carry general liability insurance, also referred to as commercial general liability insurance.
It’s important to note that Amazon’s insurance requirements are in place to protect both the seller and the customer. By having insurance coverage, sellers can protect themselves against potential lawsuits and financial losses. At the same time, customers can feel confident knowing that they’re protected in the event that a product they purchase causes harm or damage.
Understanding Amazon Insurance Requirements
If you are an Amazon seller, it is essential to understand the insurance requirements set by Amazon. Failing to meet these requirements could lead to suspension or even termination of your seller account. In this section, we will provide an overview of Amazon’s insurance requirements, the policy limit necessities, and the types of required insurance.
Insurance Requirements Overview
Amazon requires sellers to obtain and maintain commercial general liability insurance and product liability insurance with limits of at least $1,000,000 per occurrence and in aggregate. This means that your policy should cover bodily injury, property damage, and product liability claims arising from the products you sell on Amazon.
Policy Limit Necessities
It is important to note that Amazon’s insurance requirements are not just limited to the minimum coverage limits. Amazon also requires sellers to maintain insurance coverage throughout their tenure on the platform. Therefore, you must ensure that your policy limits meet the current requirements at all times.
Types of Required Insurance
Amazon requires sellers to have commercial general liability insurance and product liability insurance. Commercial general liability insurance covers third-party claims for bodily injury and property damage arising from your business operations, while product liability insurance covers claims arising from the products you sell.
In addition to these two types of insurance, Amazon also recommends that sellers consider purchasing an umbrella or excess liability insurance policy. These policies provide additional coverage beyond the limits of your primary insurance policies and can protect you from catastrophic losses.
In conclusion, understanding Amazon’s insurance requirements is crucial for all sellers to avoid any potential risks. Make sure to obtain and maintain the required insurance policies with appropriate coverage limits to protect your business and comply with Amazon’s policies.
Insurance Policies for Amazon Sellers
If you are an Amazon seller, you are required to have insurance coverage that meets Amazon’s insurance requirements. This includes a general liability insurance policy, a product liability coverage policy, and a professional liability insurance policy. In this section, we will discuss each of these policies in more detail.
General Liability Insurance
A general liability policy is a type of insurance that provides coverage for claims of bodily injury or property damage caused by your business operations. Amazon requires that sellers have a general liability policy with a minimum coverage of $1 million per occurrence. This means that the policy would pay out for all claims resulting from a single incident or occurrence. The policy must also cover all products that you have listed on Amazon.
Product Liability Coverage
Product liability coverage is a type of insurance that protects against claims of injury or damage caused by a product that you sell. Amazon requires sellers to have product liability coverage with a minimum coverage of $1 million per occurrence. This coverage must encompass all products that you have listed on Amazon.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, provides coverage for claims of negligence or errors in your professional services. Amazon requires sellers to have professional liability insurance with a minimum coverage of $1 million per occurrence. This coverage must encompass all professional services that you offer on Amazon.
It is important to note that the deductible for any policy or policies for Amazon liability insurance must not be greater than $10,000. Additionally, your insurer must have global claim handling capability and a financial rating of ‘S&P A-‘ and/or ‘AM Best A-‘ or better.
Having the right insurance coverage is important for Amazon sellers to protect themselves against potential liability claims. Make sure that you have the necessary insurance policies in place to meet Amazon’s requirements and protect your business.
Additional Insured and Certificates of Insurance
When it comes to Amazon insurance requirements, it’s important to understand the role of additional insureds and certificates of insurance. This section will cover the basics of both and how they relate to Amazon sellers insurance.
Role of Additional Insureds
An additional insured is a person or entity that is added to an insurance policy to provide coverage for that person or entity. In the case of Amazon sellers, Amazon may require that they name Amazon as an additional insured on their insurance policy. This means that Amazon would be covered under the seller’s policy in the event of a claim related to the seller’s products.
Obtaining a Certificate of Insurance
A certificate of insurance is a document that provides evidence of insurance coverage. Amazon may require sellers to provide a certificate of insurance that lists Amazon as an additional insured. This document should include the name of the insured, the policy number, the effective dates of coverage, and any additional insured parties.
To obtain a certificate of insurance, sellers should contact their insurance provider and request one that meets Amazon’s requirements. Once the certificate is obtained, sellers should upload it to their Amazon seller account to ensure that they are in compliance with Amazon’s insurance requirements.
Overall, understanding the role of additional insureds and certificates of insurance is crucial for Amazon sellers who want to protect themselves and comply with Amazon’s insurance requirements. By naming Amazon as an additional insured and providing a certificate of insurance, sellers can ensure that they are covered in the event of a claim related to their products.
Amazon’s Insurance Requirements for Different Seller Types
If you are an Amazon seller, you need to understand the insurance requirements that Amazon has in place. These requirements vary depending on the type of seller you are, and it is important to know what is expected of you to avoid any penalties or issues with your account. In this section, we will go over the insurance requirements for different seller types.
Requirements for Pro Merchants
If you are a Pro Merchant on Amazon, you are required to obtain and maintain commercial liability insurance within 30 days after exceeding $10,000 in gross revenue in any given month. The insurance policy must have a minimum limit of $1,000,000 per occurrence and in aggregate, and cover bodily injury, personal injury, and broad form property damage arising out of your products or business operations. Amazon clearly states these insurance requirements on their website here.
International Sellers’ Obligations
International sellers who sell on Amazon.com are required to have insurance coverage that meets or exceeds the requirements of the country where their products are being sold. Additionally, they must provide Amazon with proof of insurance coverage upon request. This is to ensure that international sellers are meeting the same standards as domestic sellers and to avoid any legal issues.
Private Label and Retail Arbitrage Considerations
Private label sellers and retail arbitrage sellers should also consider insurance coverage to protect their business. Private label sellers should obtain product liability insurance to protect against any claims related to their products. Retail arbitrage sellers should obtain general liability insurance to protect against any claims related to their business operations. It is important to note that Amazon does not require private label or retail arbitrage sellers to have insurance coverage, but it is recommended to protect your business.
In summary, Amazon has insurance requirements in place for different types of sellers. If you are a Pro Merchant, you are required to have commercial liability insurance that meets certain requirements. International sellers must have insurance coverage that meets or exceeds the requirements of the country where their products are being sold. Private label and retail arbitrage sellers are not required to have insurance coverage, but it is recommended to protect their business.
Financial and Legal Considerations
When it comes to Amazon insurance requirements, there are several financial and legal considerations to keep in mind. Understanding these considerations can help you choose the right insurance policy and ensure that your business is properly protected.
Understanding Deductibles and Limits
One of the most important financial considerations when it comes to Amazon insurance requirements is understanding deductibles and limits. A deductible is the amount that you will have to pay out of pocket before your insurance policy kicks in. It is important to choose a deductible that you can afford in case of an incident.
In addition to deductibles, you will also need to consider policy limits. Policy limits are the maximum amount that your insurance policy will pay out for a given incident. You will need to make sure that your policy limits meet Amazon’s requirements, which include a minimum coverage of $1 million per occurrence.
Legal Entity Name and Coverage
Another important legal consideration when it comes to Amazon insurance requirements is your legal entity name and coverage. Your insurance policy must cover all products that you have listed on Amazon, and your legal entity name must match the name on your Amazon seller account.
It is also important to make sure that your insurance policy provides liability coverage. Liability coverage protects you in case someone is injured or their property is damaged as a result of your products or services. Make sure that your policy covers both bodily injury and property damage.
Finally, it is important to be aware of any exclusions in your insurance policy. Exclusions are specific situations or events that are not covered by your policy. Make sure that you understand what is and is not covered by your policy to avoid any surprises in the event of a claim.
By understanding these financial and legal considerations, you can choose the right insurance policy to meet Amazon’s requirements and protect your business.
Risk Management and Additional Coverage Options
As an Amazon seller, it’s important to understand that the minimum insurance requirements set by Amazon may not be enough to fully protect your business. In addition to meeting the minimum requirements, you may want to consider additional coverage options to further mitigate your risks.
Umbrella and Excess Liability Policies
An umbrella policy is a type of liability insurance that provides additional coverage beyond the limits of your primary liability policy. This type of policy can be useful in situations where a claim exceeds the limits of your primary policy, providing an extra layer of protection. Excess liability policies are similar to umbrella policies, but they only kick in once the limits of your primary policy have been exhausted.
Cyber Insurance for Ecommerce
As an ecommerce seller, your business is vulnerable to data breaches and cyberattacks. Cyber insurance can provide coverage for losses related to data breaches, such as the cost of notifying affected customers, providing credit monitoring services, and defending against lawsuits. This type of policy can also provide coverage for losses related to cyberattacks, such as funds stolen from your business bank account.
Commercial Property and Auto Insurance
If you have a physical location for your business, commercial property insurance can provide coverage for your building and its contents in the event of a covered loss, such as a fire or theft. If you use a vehicle for business purposes, commercial auto insurance can provide coverage for accidents that occur while driving for business purposes.
Overall, it’s important to carefully evaluate your business’s risks and consider additional coverage options beyond the minimum requirements set by Amazon. By taking a proactive approach to risk management and insurance, you can help protect your business from unexpected losses.
Working with Insurance Providers
When it comes to obtaining insurance coverage for your Amazon business, you have a few options. You can work with insurance providers directly, or you can take advantage of Amazon’s Insurance Accelerator program to access vetted insurance providers. Here are some things to consider when working with insurance providers.
Selecting Vetted Insurance Providers
If you decide to go through Amazon’s Insurance Accelerator program to access vetted insurance providers, you’ll want to make sure you select a provider that meets your needs. Amazon vets its providers to ensure they have a good financial rating and a track record of paying out valid claims. This can give you peace of mind that you’ll be covered in the event of an accident or other incident.
Insurance Quotes and Competitive Rates
Once you’ve selected a provider, you’ll need to get a quote for your coverage. Amazon’s Insurance Accelerator program promises “competitive rates” for qualified sellers. However, it’s important to note that rates can vary depending on your business size, location, and other factors. You’ll want to make sure you understand what’s included in your coverage and what your premiums will be before you sign up for a policy.
Overall, working with insurance providers can be a great way to protect your Amazon business from liability. Whether you choose to work with Amazon’s vetted providers or go through an insurance company like Marsh or Insureon, make sure you do your due diligence to ensure you’re getting the coverage you need at a price you can afford.
Compliance and Claims Handling
When it comes to Amazon insurance requirements, there are two important areas to consider: policy compliance and claims handling. In this section, we will discuss both of these areas in detail.
Policy Compliance
To comply with Amazon’s insurance requirements, you will need to have a policy that meets certain criteria. This includes a minimum coverage of $1 million per occurrence, which is the maximum amount the policy would pay out for all claims resulting from a single incident or occurrence. Your coverage must also encompass all products you have listed on Amazon.
In addition, Amazon requires that your insurance policy names Amazon and its assignees as additional insureds. This means that Amazon will be covered under your policy in the event of a claim related to your products.
Claims Reporting and Handling
If you need to report a claim, you can do so through the Amazon A-to-Z Guarantee. This program is designed to help customers who are dissatisfied with a product they purchased on Amazon. If a customer makes a claim against you, Amazon may reimburse them directly and then seek reimbursement from you.
To ensure that claims are handled in a timely and efficient manner, Amazon has a global claim handling capability. This means that claims can be handled in multiple languages and time zones, and that Amazon has a team of experts to help resolve claims.
When it comes to claims related to defective products, accidents, medical expenses, libel, slander, and other issues, your insurance policy will come into play. You will need to work with your insurance provider to report the claim and provide any necessary documentation. Your insurance provider will then handle the claim according to the terms of your policy.
Overall, it is important to understand Amazon’s insurance requirements and to ensure that you have the right coverage in place. By complying with these requirements and reporting claims in a timely manner, you can help protect your business and ensure that your customers are satisfied with their purchases.
Amazon Insurance Accelerator Program
If you’re an Amazon seller, you may have heard of the Amazon Insurance Accelerator program. This program gives sellers access to Amazon’s network of vetted insurance providers who will evaluate, and if appropriate, offer liability insurance at “competitive rates” to qualified sellers.
Program Benefits for Sellers
The Amazon Insurance Accelerator program offers several benefits to sellers. First and foremost, it provides you with peace of mind knowing that you have liability insurance in place in case something goes wrong. This can be especially important if you’re running an LLC or other type of business entity where you could be held personally liable for any damages that occur.
In addition to the peace of mind that comes with having insurance, the Amazon Insurance Accelerator program also offers enhanced claims coverage. In the event of eligible claims, Amazon takes on the responsibility for amounts up to $1,000, providing sellers with added protection.
Participation Requirements
To participate in the Amazon Insurance Accelerator program, you must meet certain requirements. You must be an active Amazon seller in good standing, and you must have a U.S. business entity. You’ll also need to have a business owner’s policy (BOP) or commercial general liability (CGL) insurance policy in place.
Once you have met these requirements, you can apply for the program through your Seller Central account. After completing a simple digital application, you’ll receive quotes from leading insurance carriers. You can then select your preferred policy and purchase coverage. It’s quick and easy to get started with the Amazon Insurance Accelerator program.
Overall, the Amazon Insurance Accelerator program is a valuable resource for Amazon sellers who want to protect their business and their assets. By providing access to vetted insurance providers and enhanced claims coverage, the program offers peace of mind and protection to sellers. If you’re an Amazon seller, it’s worth considering whether the Amazon Insurance Accelerator program is right for you.
Frequently Asked Questions
What are the liability insurance prerequisites for selling on Amazon?
If you are an Amazon seller, you are required to have commercial general liability insurance with a minimum coverage of $1 million per occurrence to cover claims resulting from a single incident or occurrence. The coverage must encompass all products the seller has listed on Amazon. You must obtain and maintain this liability insurance within 30 days after exceeding $10,000 in gross proceeds in sales in one month on Amazon.com, or if otherwise requested by Amazon.
How much commercial auto liability coverage is needed for Amazon Relay participation?
If you are participating in Amazon Relay, you are required to have commercial auto liability insurance with a minimum coverage of $1 million per occurrence. Amazon Relay is a program that enables truck drivers to transport Amazon freight from one location to another.
What type of insurance is required for Amazon truck drivers?
Amazon truck drivers are required to have commercial auto liability insurance with a minimum coverage of $1 million per occurrence. They must also have workers’ compensation insurance, which provides benefits to employees who are injured or become ill as a result of their job.
Are there specific insurance policies required for Amazon employees?
Amazon employees are covered by various insurance policies, including health insurance, life insurance, and disability insurance. The specific policies and coverage amounts vary depending on the employee’s position, location, and other factors.
What details must be included on the Certificate of Insurance for Amazon sellers?
The Certificate of Insurance for Amazon sellers must include the insurance company’s name, the policy number, the policy effective date, the policy expiration date, the policy limits, and the name and address of the insured. The certificate must also name Amazon.com Services LLC and its affiliates as additional insureds.
Where should the Certificate of Insurance be addressed when selling on Amazon?
The Certificate of Insurance should be addressed to:
Amazon.com Services LLC Attn: Risk Management 410 Terry Ave. North Seattle, WA 98109-5210
It is important to keep in mind that Amazon may request additional insurance coverage or documentation depending on the seller’s business activities.
