If you’re selling on Amazon without the proper insurance, you could be setting yourself up for disaster. Every day, sellers find themselves caught in legal battles that could’ve been easily avoided. Don’t be one of them—read on to discover how insurance can safeguard your Amazon business and help you thrive without fear.
Why Insurance is Crucial for Amazon Sellers
The world of Amazon selling is filled with opportunities, from private labeling to retail arbitrage. But, with the potential for big rewards comes an important question: Are you truly covered if things go wrong?
Imagine this scenario: a customer claims that a product you sold malfunctioned, causing significant damage to their property. Without insurance, you could be looking at expensive lawsuits and financial headaches.
This is where insurance steps in—not just as a backup, but as a protective parachute ready to save your business from the unexpected.
Understanding Amazon’s Seller Insurance Requirements
When you’re setting up your Amazon store, one thing you can’t afford to overlook is insurance. Amazon makes it clear: If you’re a Pro Merchant or if your sales top $10,000 in any month, you’re required to have commercial general liability insurance.
The Key Criteria for Amazon Seller Insurance
Amazon is specific about the type of coverage required:
- $1 million coverage: Your policy needs at least $1 million in coverage per occurrence and in aggregate.
- Occurrence-based coverage: Options like commercial general, umbrella, or excess liability are generally accepted, but they must be occurrence-based.
- Insurance for Amazon: Your policy must list Amazon and its assignees as additional insureds.
- Global claim handling and financial stability: Amazon requires your insurer to have a global claims capability and a financial rating of “S&P A-” and/or ‘AM Best A-’ or better
- Policy deductibles: Any deductible must be under $10,000.
- Comprehensive coverage: Your policy should cover all products sold on Amazon.
- Policy holder name matching your registered business: The insured name must match your legal entity name with Amazon.
With so many specific requirements, it’s critical to choose the right insurance policy. That’s why our plans are designed specifically for Amazon sellers, making it easier to get coverage, receive your policy documents, and upload the necessary certificate to Amazon.
Will Amazon Cover Any Claims?
Amazon offers an A-to-Z guarantee to protect customers from personal injury and property damage. Here’s the catch: Amazon will cover claims under $1,000 directly, without involving the seller. But they will only do so if the seller has valid, Amazon-approved insurance.
As long as your insurance is up to par, Amazon will handle claims under $1,000, freeing you from the stress and potential costs of these smaller claims.
The Types of Insurance Amazon Sellers Need
Let’s take a look at some of the most common insurance policies that can help protect Amazon sellers from unexpected risks.
- Commercial General Liability Insurance: If you reach $10,000 in monthly sales, you need this policy. It covers bodily injury, property damage, and other general business liabilities.
- Product Liability Insurance: While similar to general liability, this policy focuses on claims related to product defects. Though not a replacement for general liability, it can be added to your policy for added protection.
- Business Owner’s Policy (BOP): This combines general liability and commercial property insurance, offering protection from events like fire, theft, or bodily injury claims. While optional, it’s worth considering if you store inventory outside of Amazon’s warehouses.
- Workers’ Compensation Insurance: If you have employees, this policy provides coverage for work-related injuries. It’s often required by law in many U.S. states, but it’s not mandatory for Amazon sellers unless you have employees.
- Cyber Insurance: In today’s digital age, protecting against data breaches and cyberattacks is crucial. Cyber insurance helps safeguard your business against online threats and data loss.
Commercial Umbrella Insurance: This policy offers extra coverage beyond your primary policies, protecting you when the limits of your general liability or workers’ compensation insurance are reached.
How Much Does Amazon Seller Insurance Cost?
Insurance costs can vary depending on your business size, product type, and sales volume. Typically, smaller businesses with lower-risk products will pay less, while high-risk categories or larger operations may face higher premiums.
Some of the factors that affect your premium include:
- Product category: Low-risk products, like handmade crafts, will cost less to insure than high-risk products, like electronics.
- Business size and income: As your business grows, your insurance premiums are likely to increase.
- Assets and equipment: More valuable inventory or sophisticated equipment can raise your insurance costs.
Policy details: Higher policy limits or lower deductibles will affect your premium.
How to Secure Amazon Seller Insurance
Whether you’re starting a new policy or renewing your existing coverage, it’s essential to get insurance that fits your business needs. At YAS, we offer pay-as-you-sell insurance tailored specifically for Amazon sellers. With premiums based on your actual sales, you won’t be paying for unnecessary coverage.
Get your free quote today and start protecting your Amazon business with affordable, comprehensive insurance!