When most sellers first start their Amazon business (myself included), they often don’t realize that if you’re a Pro Merchant Amazon will require you to have liability insurance.
This may sound intimidating to some, but e-commerce insurance isn’t as complicated (or expensive) as you may think.
Side note: This is why it is very important to read Amazon’s TOS before you open an account and start selling.
If you’re selling on Amazon, you need to treat it like any other business, and having the proper insurance to protect yourself and your business is part of that.
In this post, we’ll be digging into:
- Why you need insurance to sell on Amazon
- Amazon’s insurance requirements
- What type of insurance you need
- Where to get insurance and the cost
Why do you need insurance to sell on Amazon?
If you’re like many new or experienced sellers, you probably didn’t realize that Amazon, at some point, requires you to have product liability insurance.
You may be thinking, “Well if anything goes wrong Amazon has my back, right?”
Wrong. Amazon does not want the responsibility and it is up to you, as a business owner and Amazon seller, to have the proper insurance.
The reason behind this rule is very simple: To protect yourself/your company’s assets and cover any financial obligations resulting from accidents, injuries, or litigations.
And while the chances of a customer suing you may be low, it’s better to err on the side of caution — and adhere to Amazon’s rules.
Take the case of a couple suing Amazon for faulty solar eclipse glasses as an example. The couple claims the glasses they bought on Amazon did not protect their eyes during the solar eclipse and ruined their vision.
As a seller, you may not think such a simple product would harm anyone, but accidents do happen. It’s probably the last thing on your mind when selling products on Amazon, but better to protect yourself from unforeseen incidents than to not have insurance at all.
Should you form an LLC for added protection?
Although it’s not required to have an LLC (Limited Liability Company) to sell on Amazon*, it may be a good idea to form one in the future as your business grows, since an LLC protects your personal assets in case of a lawsuit.
Having an LLC plus product liability insurance will give you more peace of mind, especially if you are a bigger seller.
Amazon’s requirements (and where to find this info)
In Seller Central, it is a little unclear where to find information on Amazon’s insurance requirements. But, on the Program Policy help page, Amazon lists numerous policies that you, as a seller, must abide by.
Towards the bottom of that list, you will see Pro Merchant Insurance Requirements. On this page, Amazon clearly states what the insurance requirement is:
“Under section 9 of the Amazon Services Business Solutions Agreement, you are required 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, or if otherwise requested by us. You may purchase either commercial general, excess, or umbrella liability insurance. When you decide on an insurance, your policy should cover all products you list for sale on Amazon.”
The Insurance Requirements page also states that the criteria your insurance policy must meet:
Insurance policy criteria
Your commercial liability insurance policy must meet all of the following criteria:
- Policy limits must be at least $1 million per occurrence and in aggregate, covering all liabilities caused by or occurring in conjunction with the operation of your business, including products, products/completed operations and bodily injury;
- Policy type can be either commercial general, umbrella, or excess liability insurance and must be written on an occurrence basis;
- Your insurance provider must have global claim handling capability and a financial rating of S&P A- and/or AM Best A- or better (if S&P or AM best is not valid or used in the country where you are required to obtain insurance, a local equivalent is allowed);
- Your insurance provider must give Amazon at least 30 days’ notice of cancellation, modification or nonrenewal;
- The policy must name ” Amazon.com Services LLC., and its affiliates and assignees” as additional insureds;
- The deductible for any policy(ies) must not be greater than $10,000 and any deductible amount must be listed on the certificate(s) of insurance;
- The policy must cover all sales from products you have listed on the Amazon website;
- Your insured name must match the “legal entity” name you provided to Amazon (To view your legal entity name, see your Account Info page);
- The policy must be completed in its entirety and signed; and
- The policy must be valid for at least 60 days from the date of submission.
So basically this means if your sales are over $10,000 in one month, you will need to carry insurance with at least $1,000,000 in coverage.
Even if you’re just starting out or are a little below the insurance threshold, we still recommend being insured. You never know what could happen with one of the products you sell. And just because you don’t meet Amazon’s threshold doesn’t mean you won’t be liable if a customer gets injured.
What type of insurance you need
Amazon requires sellers to have $1M in coverage.
You must have Commercial General Liability (CGL), Umbrella and/or Excess Liability Insurance coverage with limits of not less than:
$1,000,000 per occurrence, $1,000,000 in the aggregate for products and completed operations, and $1,000,000 in the general aggregate. Such insurance must include products liability, products/completed operations, bodily injury, personal injury, broad form property damage, and broad form contractual coverage.
You may also satisfy the insurance limits by using any combination of Commercial General Liability and Umbrella and/or Excess Liability insurance. However, if you do this, the required ‘Additional Insured’ wording must be as follows:
“Amazon.com, Inc., its affiliates and assignees are additional insureds, as their interests may appear”
Amazon states: “Please contact your insurer to add ‘Amazon.com Services LLC and its affiliates and assignees’ with address ‘P.O. Box 81226, Seattle, WA 98108-1226.’ as an additional insured.”
Will Amazon cover any claims?
Yes, Amazon’s new insurance policy states that it will cover any claims under $1,000.
“Amazon will resolve and pay for valid property damage and personal injury claims against sellers under $1,000 as a concession to customers. Claims under $1,000 account for more than 80% of cases in our store, and Amazon will bear these costs and not seek reimbursement from sellers who abide by our policies and hold valid insurance. These concessions will not affect your order defect rate, and you will be kept informed at every step so you can continue to ensure your products are safe.”
Where to get liability insurance and how much it costs
Applying for Commercial General Liability, Umbrella, and/or Excess Liability Insurance coverage is pretty straightforward. Simply contact insurance companies such as Wells Fargo, Progressive, Geico, etc. to receive quotes (Amazon-specific insurers are listed below).
And because it is largely product liability insurance that is required, your quote will be based on your estimated annual revenue. The average cost is typically around $500-$1,000 per year.
To easily view quotes from multiple insurance companies, you can use Insureon. They will send you multiple quotes from top carriers to compare. Make sure you let the insurance agent know you are an Amazon seller beforehand though. That will ensure Amazon’s exact requirements are covered.
Amazon Insurance Accelerator
Amazon has launched its new insurance accelerator to make it easier and more affordable for sellers to obtain insurance. They partnered with Marsh to offer a network of vetted insurance providers so you can quickly obtain quotes and get insured fast.
Insurance companies specifically for Amazon sellers
Here are a few insurance companies that work specifically with Amazon and eCommerce sellers:
What’s great about using the insurance companies listed above is that they will know exactly what type of coverage you need as an Amazon seller.
Do I need to upload proof of insurance to Amazon?
Yes, once you obtain insurance, you must upload your Certificate of Insurance to Seller Central. You can get the Certificate of Insurance from whichever provider you get insurance from.
I am an international seller selling in the US. How can I obtain insurance?
Contact the insurance companies that Amazon has listed in their Insurance Accelerator. You can also contact Marsh, a global insurance broker that can help international sellers obtain the required insurance.
Protect yourself and your Amazon business
And that’s it! As you can see, getting insurance for your Amazon business isn’t as difficult as you might think. Plus, it will give you and your business some much-needed protection (just in case).
In other words, have peace of mind so you can focus on growing your business!
If you have any other questions regarding Amazon seller insurance, please leave a comment below!
*Disclaimer: This is not intended to serve as legal, tax, or other financial advice. For this reason, you are advised to consult with your own attorney, CPA, and/or other advisors regarding your specific situation.
Are you still able to obtain insurance even if you are selling as an individual and not a business?
Yes, you can. Contact insurance companies; they will be able to help you with that question more.
Did Amazon issue a press release on this? If they did, I can’t find it.
Also, where does Amazon tell buyers about this policy, so that the buyers know that the seller is required to have insurance of $1 million? I can’t find that either.
The link is in the article: https://sellercentral.amazon.com/help/hub/reference/1791?ref=efph_1791_cont_G521&locale=en-US&
Also, further down in the TOS, you’ll see the required insurance amount. Just search for “insurance” on the page (control + f)
Doit-ont énumérer sur le certificat d’assurance les items vendu sur Amazon?
Nous avons Télécharger notre certificat d’assurance et il a été rejeté par Amazon
Tout y est, Amazon.com Services LLC et ses sociétés , adresse complète, nous avons une assurance de 5 millions , déductible de 10,000 etc…
Donc aucune idée pourquoi Amazon rejette le certificat
You do not need to list the items you have for sale on the certificate. Is the document you uploaded legible and clear? That could be why they did not accept. I suggest contacting Seller Support to see if they can help you understand why it was rejected.
Hello, is there a list for insurance companies in the UK? Thanks
Search for insurance companies in your area and start contacting some to see if they can provide the right insurance for your business.
Is it required to register my business to get insurance especially when I am just starting? And how can I register by fba business from outside USA to get insured and how much it can cost to register a business??
If you are selling over $10,000 per month, you will be required to have insurance but if you are selling products on Amazon at any level, we suggest looking into insurance right away.
I suggest contacting various insurance companies to get quotes. Amazon also provides insurance companies to contact within Seller Central.
Hello, what if I also sell vitamins but insurance can not cover with all other products, should I buy one more insurance to cover vitamins?
Yes, if that is the case, make sure you purchase the right insurance to cover the types of products that you sell.
Thanks for the great article. I am an Amazon seller based in Canada. Is a 2,000,000 Canadian dollars will be accepted by Amazon.com?
Yes, it will be.
Is it possible to insure products if Amazon employees loses my product? Or the costumer who buys this product, return it, replace it, or simply spoil it and Amazon employees takes it back? Or customer steals a part of the package and the fact of it is left unnoticed.
No, that is not possible. Though if Amazon loses your product, they will reimburse you for it. If a customer returns the incorrect product to you, open a case with Seller Support and you should be able to get your money back if you can prove the customer returned a different product.
Hello, thanks for the article.
If I chose to sell on amazon and other market places as well(Shopify, walmart) – is there a way to get 1 insurance that covers them all? Whats the best companies to contact ?
I suggest contacting a few different insurance companies to see if they can help you out with this request. Many insurance companies that can insure your Amazon business, will also insure other marketplaces.
What happens if I don’t provide it and Amazon keeps requesting it? Will they take action against me or just let me be?
If Amazon requests this from you and you do not provide it, they could suspend your account.
Hello, my business located in Turkey, what should I have to do?
Contact local insurance companies in your country to see if they can help insure your business.
Would amazon give me some extra days to upload the proof? I have contacted different companies in the US but none have approved my request (maybe because I am in the supplement category?).
I am not sure about that. I suggest contacting Seller Support with this question.
Hey, was wondering if you could help me out on this a bit. I am trying to figure out if the automated email they have been sending out requesting insurance information applies as an actual official request? It says it must be uploaded within 30 days of their email. But not sure if everyone got it that I can just ignore it unless they follow up directly. I’m confused because I am a merchant seller not FBA and I am only doing around $500 a month in sales. I used to do FBA (and maybe even at one point hit over $10,000 in sales in one month on this one product I’m still selling now as FBM but rarely did that happen that my sales were that high it has often been pretty low) I’m scared to open a case with seller central in case it would draw even more attention to my account. I obviously can’t afford liability insurance at this point.
Do you know if the email they sent out was a mass automated email to everyone? Thanks a million!!
If you are not currently doing over $10,000 in sales, you should be fine with this requirement. Have you hit over $10,000 in sales in one month this year at all? If so, it will likely be required from you.
Also, it does not matter if you fulfill FBM or FBA, the insurance requirements still apply.
Please recommend a solution for EU based businessses!
@Brian Connolly – the insurance accelerator DOES NOT WORK!!!
It only offeres a solution for US companies – what are we( NON US companies supposed to do?)
Have you contacted local insurance agencies in your country? That will be your best bet.
Amazon Accelelator program does not work for companies in some EU countries as already mentioned in previous comment. Any concrete advice how to solve the issue when this is the case?
Thank you very much in advance.
My only advice would be to contact insurance companies in your country.
what will happen if i don’t get insurance?
If Amazon asks for it and you do not have it, I suspect they may suspend your account until you can show proof.
What if we don’t want to get insured? Does Amazon allow us to remain uninsured or they block our account if we don’t get out products insured?
If you meet the sales threshold that Amazon has in place, then you will be required by them to have insurance. If you do not and they request proof, then they may suspend your account.
i am seller from Europe. Insurance companies in US cannot make this service for sellers from EU and Incurance companies from EU what we contacted dont offer this service for US market. When i ask Amazon, we got – as usually – generick answer, not solution or advice
Do you have any recomenndation?
Check out Amazon’s insurance accelerator: https://sellercentral.amazon.com/mario/v2/az/flow/BusinessInsurance/page/InsuranceEstablishment/global/render
They list a couple of insurance companies. They may be able to help you.
facing same problem being EU seller, plz guide if you have found a solution
Check Amazon’s insurance accelerator: https://sellercentral.amazon.com/mario/v2/az/flow/BusinessInsurance/page/InsuranceEstablishment/global/render
They have some insurance companies listed that may be able to help you.
NEXT doesn’t work with companies that are not based in the US. FYI so European sellers can save precious time while finding the agency that can help.
I am a seller located in india and sells on amazon.com
From where i can get insurance.. ?i dont find any indian compang for this..? Please help me
I suggest looking for insurance companies in your home country and ask if they can help insure your Amazon business.
Hello we are sole proprietor in amazon but we receive this mail regarding insurance we are india based seller we sell on amazon.com your article really help can you please guide should we go for the insurance
If Amazon states that you are required to get insurance, then you must have it to sell.
Can I get insurance even if I dont have products on Amazon
If you don’t have any products on Amazon, then you will not need insurance. Once you meet the sales threshold, you will need it.
How can you find out if they will take a claims made policy vs per occurrence???
Read through Amazon’s terms of service so you know actually what is and is not accepted.
thank you for the great article! I have the same question as some in some of the other comments – I have a company registered in Europe and selling the USA on Amazon.com.
The US-based insurance companies I contacted do not offer insurance for non-US companies. European insurance companies do not offer insurance for companies operating on the US marketplace. Should I register a US-company and get insurance for it? Would that be a problem if the account is registered with the non-US company?
Would you be able to write an article what companies in this situation should do to obtain an insurance as per Amazon’s requirements? This is a very hot topic now with the new A-Z guarantee requirements from Amazon.com.
My best guess is to have a company registered in the US and have that company insured. Though I am not completely sure about this situation. Have you tried contacting Amazon support to see if they have a solution to this issue?
We are a Hong Kong registered company selling products to the US and other global markets. Are there any insurance carriers that can provided the required coverage for all countries including the US. I’m thinking perhaps Lloyds of London or one of these global carriers. Thank you.
You will need to contact different insurance carriers to see if they can meet your requirements.
Please advise- will Amazon accept a Blanket Additional Insured endorsement along with a certificate of insurance indicating policy limits and term? Insurance company will ot name Amazon individually as an additional insured.
You will need to check with Amazon on that or find a different insurance company.
So I’m trying to get an insurance quote, but they did ask a question if my product has a certification that meet USA requirements. Do you have an article on this? I sell a blanket for kids. Just wondering if that would need to pass some kind of lab test. My product does come from china..
No, we don’t currently have anything on this yet. Check out this site for more info on a certification requirement: https://www.cpsc.gov/Testing-Certification/Childrens-Product-Certificate-CPC
Hi Brian – well done article, and thank you for addressing the ‘Individual Seller’ level which is what I’ll be starting out at. Of many articles I gleaned on the net you’re the only one that I came across who addressed this at all. In particular I appreciated your lines:
‘This means that if you have an individual seller account, Amazon does not require you to have insurance. (You should probably still have insurance but we’ll get to that in a little bit.)’
I also appreciate your listing of companies specializing in this – great help!
Accordingly, I’ll be getting insurance before I make sale one.
I am happy to hear this article helped you out! Thanks for reading.
Am I reading this incorrectly? (I understand you aren’t an attorney nor do you play one on TV…) But under #9 of the TOS, it lists that you are covered until three consecutive months of $10,000 gross in sales. I’m not at that volume (yet!) but am trying to prioritize expenses as a newer seller.
Once you reach that amount of revenue per month, that’s when Amazon will require the insurance.
Do I need to have a business address in US to get such Amazon required insurance coverage? What if I do not have one?
I am not sure of that question. I suggest you contact the insurance companies for that information.
Thank you for this article. I had no idea where to go for coverage.
Thanks for reading! We are glad this helped you out.
Informative article! Is General Liability of 1M not enough? I would also need to purchase Umbrella and Excess? Received a quote from NEXT Insurance for my ecommerce business but it did not include policies entitled “Umbrella” and “Excess”. I just want to be clear. Thank you!
Amazon states “commercial general, umbrella or excess liability insurance…” so general should be just fine. If you’re not sure, double-check with Amazon.
Great article. high lighted a few of the issues that I was unaware of, that AMZ needs to be added to the insurance document!
Im a UK based seller – will these insurers in the US be able to help me? If not, could you recommend a specialist UK amazon insurer?
They may be able to! I am not sure about that. I suggest contacting each to see if they can help you.
Hi, thank you for the article!
I’m from Israel and working on products to begin selling soon.
What would you recommend for insurance?
An Israeli insurance or one from US?
I am a seller from Europe with a European company and selling on amazon.com. The insurance companies which you listed are making insurance for non-USA residents?
I am not sure about that. Please contact these companies directly to find out.
What if I do over the threshold in the US, but also sell in Canada and Mexico through the NARF program, but in those countries my sales do not exceed the thresholds?
Then you would only be required to have seller insurance in the US, according to Amazon’s terms.
I am in the UK and only selling in the UK at the moment. Any advice on where to go here? If I sell in the US in the future, I will follow the above advice.
Not sure about insurance options in the UK. Do a quick search to find more information in your area!
I am the owner of an Switzerland based LLC and I would like to have a clear recommendation from your side as per what we need to do. At the moment we’re under the 10k$ / month but we expect to grow above that shortly. Obviously I fully understand your article and the possibility of being sued is frightening.
Your straightforward approach and advise will be highly appreciated.
At that point, you should begin to look into insurance just to be safe!
Hello Brian & eCommerce Sellers. This is Matt Lovell with WELL Insurance, thank you for including us in the article as a featured eCommerce Insurance Agency. We are here to help US sellers. Please feel free to reach out with any questions on coverage and how it applies to your business specifically. Be Proactive, not Reactive!
do you guys offer insurance as per Amazon’s requirements for companies registered in Europe that sell in the USA on Amazon.com?
Could you provide some information and links to UK based business?
What if I’m not based in the US and do not have a registered US company?
If you are selling on Amazon US, it will apply to you.
Does it applicable on Indian marketplace??
I am not sure about that. You will need to read through Amazon India’s terms of service to see if that is a requirement.