Amazon Seller Insurance – An Option You Should Not Miss
Amazon Pro Sellers are required to have insurance in order to protect their business from unexpected scenarios. Your Amazon store is a business and you need to treat it if you were to own a physical clothing store or restaurant. Accidents can happen at any given moment and if one of your products causes damage or injury to your customer, you’ll most likely be slammed with legal fees.
What is Amazon Seller Insurance?
Amazon Seller Insurance is a policy required by Amazon that protects both you and your business against costs that may arise as a result of any unforeseen circumstances, legal fees, bodily injuries, property damages, as well as any settlements that you may be responsible for.
In more simple words, Amazon does not want the responsibility of accidents, damages or injuries caused by the items you sell and instead, wants you to purchase coverage so that only YOU are liable for your business.
Why is Amazon Seller Insurance Needed to Sell on Amazon?
The last thing that you would like to have is a lawsuit. Even if you sell great products, a single damaged or defective product might injure one of your customers or even employees, and you’ll be seeing a lawsuit at your front door in no time.
What are the Requirements?
You are required to have Commercial General Liability Insurance which covers up to $1M in damages If you have a Professional Selling Plan. Below we’ll break it down.
Commercial General Liability Insurance – This insurance covers up to $1,000,000 in damages such as bodily injury, personal injury, property damage, and more. The insurance must indicate that Amazon.com, Inc. and its affiliates and assignees are added as additional insureds.
Pro Sellers are required to have this insurance and provide proof of Commercial General Liability with a certificate.
Individual Sellers who do not meet the ‘insurance threshold’, are not required to carry this insurance but are encouraged to have it.
If your sales reach over $10K a month, 3 months in a row, then you are required to have insurance covering at least $1M in costs. See below Amazon’s ‘insurance threshold’:
$10,000 CAD, if the Elected Country is Canada
$100,000 MXN, if the Elected Country is Mexico
$10,000 USD, if the Elected Country is the United States
Do note that Amazon’s Sellers Policy is available to only those sellers with a registered business in the U.S.
Product Liability – Perhaps you sold a damaged/faulty product (without knowing) to a customer which then resulted in an injury or caused an accident and now your customer is filing a lawsuit against you! With product liability insurance, products manufactured for your business are covered. The cost for product insurance depends on a few things such as product type, annual sales revenue, and size.
Where Do I Get Amazon Seller Insurance?
Simply contact one of the insurance companies listed below and ask them about obtaining Commercial General Liability or Product Liability insurance for your Amazon business
For businesses registered in the U.S.
Next Insurance
For businesses registered in China
AIG
PingAn
STARR
Chubb Limited
How Much does it Cost?
The average price for Commercial General Liability or Product Liability Insurance can cost you between $500-$1,000 a year and trust us, it’s worth it.
Protect your Business and Yourself
Don’t neglect your business and think that accidents can’t happen, because to be truthful, anything can go wrong at any given time, even if you think you’re selling the safest products on the market. If you do not have insurance, get the protection your business needs now.
Still doubting if you will be successful at selling on Amazon. Check out our case study here.