Amazon Seller Insurance: Everything You Need to Know
Amazon sellers insurance is very useful as it can help you defend yourself against various third-party claims. Although some people might think they don’t need it, the truth is that even with the most rigorous tests, accidents can happen to anyone.
Property damage, legal and medical fees can have a huge impact on your finances. In these cases, an insurance policy can protect you from these costs. Also, some policies, like general liability insurance, are required when you sell a certain amount on Amazon.
Here’s everything you need to know about Amazon seller insurance.
Do Amazon Sellers Need Insurance?
There are over 300 million people in Amazon’s customer base. Selling your products to so many people sounds exciting but this excitement also comes with some liability. Even if you start selling products on Amazon as a side hustle, you can still face serious consequences if you don’t set your business right, and that includes permanent account suspension.
Having amazon seller insurance is crucial for securing your Amazon e-commerce business so you can sell for a long time. Some of the biggest risks include product-related incidents and lawsuits brought against Amazon and third-part sellers. In case this happens to you, you want to be protected against the costly consequences.
What Does Amazon Seller Insurance Cover?
- General Liability Insurance: Covers third-party liability claims, such as slip-and-fall accidents. Usually, this policy includes product liability insurance for financial protection against harm that your products have caused.
- Business Owner’s Policy: As a bundled insurance option, this policy is a cost-effective way for Amazon sellers to buy general liability insurance and commercial property insurance in one.
- Workers’ Compensation Insurance: In most states, Amazon sellers who have employees are required to have this policy. It also covers sole proprietors from work injury costs.
- Cyber Liability Insurance: This type of policy covers data breaches and cyber-attacks and it is recommended for all sellers who work with credit card numbers or other types of sensitive information.
- Commercial Umbrella Insurance: This is a type of policy that boosts coverage on Amazon seller general liability, worker’s comp, or commercial auto insurance if the limit is reached on a claim.
- Commercial Auto Insurance: This type of policy is required for business-owned vehicles. It is especially useful as it covers accidents that involve an Amazon seller’s delivery van or other vehicles.
How Much is Amazon Seller Insurance?
On average, the cost of Amazon insurance is $41 per month or $492 per year for $1 million general liability insurance policies. Remember that Amazon sellers who work alone pay less for insurance than e-commerce stores with dozens of employees. Also, there are other factors that affect the cost of insurance, including:
- The type of product
- Business equipment and property
- Business income and size
- Type of insurance
- Policy limits
Does Amazon Require All Sellers to Have Insurance?
Amazon only requires Pro Merchants to have general liability insurance in case their sales exceed a certain threshold for three months in a row, which is $10,000 per month. However, keep in mind that this threshold can change at any time. But even if you’re not a Pro Merchant, it’s always a good idea to protect your business with general liability insurance.
How Do I get Amazon Seller Insurance?
Amazon sellers can get insured at trusted private insurance companies such as East Insurance Group. At Eas Insurance, you can get all the information and policies you need, including general liability, business owners’ insurance, umbrella insurance, commercial vehicle insurance, and other policies.
Do Resellers Need Liability Insurance?
Just like sellers, resellers are not technically required to have Amazon sellers insurance but it is recommended to have it to protect your business and finances from various risks that you may encounter.
Is Amazon Liable for Faulty Products?
Amazon can be held liable for faulty products that the company sells from third-party parties on its Marketplace. In 2020, an appeals court in California revers a 2019 trial court ruling and stated that federal law doesn’t protect Amazon from third-party defective product liability.
How Do I Provide Proof of Coverage to Amazon?
After the Amazon Services Team sends you an email that requests proof of liability insurance coverage, you will need to upload your Certificate of Insurance or COI within 30 days of receiving the email.
Your insurance company sends you the COI along with the details about what is covered, how much coverage you have, and any other exclusions or deductibles.
It’s easy to upload your COI: you go to the Business Insurance page in the Seller Central account setting and upload the document in .pdf. .doc, or .docx format.
Another way to do it is to send a physical copy to Amazon at:
c/o Amazon, P.O. Box 81226, Seattle, WA 98108-1226, Attention: Risk Management.
Are you still confused about Amazon seller insurance or need some help getting a quote for your business? Contact us today and get all the information you need fast and for free!
Ready to Start?
Get matched with a provider that fits your needs today.