Whether you’re a new third-party seller on Amazon or a pro that’s been at it for years, it’s important to protect yourself with Amazon sellers insurance and know when it’s a requirement.
Amazon requires some sellers to carry active coverage, and you could be asked to share a certificate of insurance. In this article, we’ll cover everything you need to know about Amazon insurance requirements, including:
If you are an Amazon seller with gross sales of $10,000 a month (or if they otherwise request it), Amazon requires you to have business insurance.
Why does Amazon have these insurance requirements? It’s because they want to limit their risks if you sell something on their platform that causes an injury or property damage. (This is sometimes called liability exposure.)
Even if you’re not required to have insurance, you may want to purchase it anyway to help ensure you’re protected if someone claims they got hurt or your product caused damage.
We’ve all heard the horror stories about toys that cause injuries to kids. This happens all the time with other products, too, even if they don’t grab headlines.
The good news is that your coverage can help protect you from financial losses if you do business on other websites or at a brick-and-mortar location, too.
Here’s what you need to know about purchasing an insurance policy that meets the Amazon seller insurance requirements.
You need $1 million in liability coverage, per occurrence and in aggregate, to meet Amazon’s seller insurance requirements.
Your policy (or policies) must include coverage for:
It’s worth noting that general liability policies typically include coverage for bodily injury, personal and advertising injury and property damage, but they don’t always provide product liability coverage. NEXT’s general liability insurance includes product liability and meets all Amazon requirements.
When you purchase coverage, you must list Amazon and its assignees as additional insureds on your policy. If you think that sounds like a lot of insurance jargon — you’re right!
Basically, it means that Amazon will have protection from your insurance provider if someone sues them because of something you did.
Because they’re listed as an additional insured, your insurance policy would help pay for the cost to defend them in a lawsuit and any settlement that may be awarded, up to the policy aggregate limit.
Amazon might send you a request for a certificate of insurance (also called a COI). If that happens, you must send it to Amazon at: c/o Amazon, P.O. Box 81226, Seattle, WA 98108-1226, Attention: Risk Management.
If you have coverage with NEXT, you can email it or download your certificate as many times as you want, 24/7, at no additional charge. All you have to do is log into your account online or download our mobile app.
For additional details on Amazon’s insurance and other seller requirements, check out Amazon’s Program Policies and the Amazon Services Business Solutions Agreement before you get started.
Amazon doesn’t want to assume responsibility for malfunctioning products or lawsuits filed by disgruntled customers. That’s why they require sellers with gross sales of $10,000 or more to carry insurance.
But keep in mind, even if you’re not required to have insurance to sell on Amazon, it’s a good idea to get coverage anyway. Insurance can help protect your finances if something goes wrong.
These types of insurance policies are best geared toward Amazon sellers:
General liability insurance is the most common type of insurance for small businesses and the self-employed because it can help you from some of the most common things that cause financial losses:
For example, if a vendor is injured on your business premises or if you accidentally damage someone’s property while working, general liability insurance can help cover legal costs and damages.
It also provides coverage for legal defense costs if you’re sued. However, it doesn’t cover everything; exclusions include employee injuries (covered by workers’ compensation), professional errors (addressed by professional liability insurance), and damage to your property (commercial property coverage).
Product liability coverage — which is included in general liability insurance — means you’re protected from financial losses (up to your coverage limits) if someone accuses you of selling a defective product that causes harm.
Product liability coverage from NEXT protects against claims from bodily injuries and property damage. It can help cover you if your product or operations cause a physical injury to another person.
Let’s assume one of your customers is riding a bike they bought from you when a wheel comes loose. They fall, break their arm and suffer a concussion.
If the customer sues you for the cost of the trip to the hospital, surgery and other doctor visits, bodily injury coverage could help pay for these expenses.
Property damage is also just like it sounds. It can help cover you if your business operations or product causes damage to someone else’s property.
For example, let’s say you sell kitchen supplies, and someone buys a coffee maker from you that has a defect and starts a fire in their kitchen.
If the customer sues you to pay for the cost to repair the damage, property damage coverage under the product liability coverage could kick in.
Although they sound alike, personal injury is different from bodily injury. It’s important for sellers to know it’s also included in their general liability coverage from NEXT.
It can help provide financial protection if you are accused of slander, libel or invasion of privacy.
If another seller accuses you of making inaccurate statements about their products so buyers are more likely to shop with you, personal injury coverage could help pay for your legal costs and any settlement that might be awarded.
General liability is the only type of coverage Amazon requires sellers to carry — and it covers lots of the risks sellers can face. But other types of insurance cover different risks. Depending on your business, you may benefit from having additional coverage.
These types of insurance coverage could also benefit sellers on Amazon:
Commercial property insurance can help safeguard essential business assets like supplies, inventory, equipment and commercial buildings. It could also help replace business income in case of temporary shutdown due to covered events.
For example, say a burst pipe floods the area you keep your inventory — your business is literally underwater! Commercial property insurance could help pay to fix the damage and cleanup to your structure, replace inventory and cover your utility bills while your business recovers.
Commercial auto insurance is similar to your personal auto policy, but you need it when you’re driving for business.
It can help cover expenses if you’re in an accident while driving to the post office to send a shipment to a customer, driving to meet a potential new distributor or moving inventory between locations.
NEXT works directly in a partnership with Amazon to ensure our policies meet their insurance requirements.
Our easy application process is 100% online, which lets you review your policy options, buy coverage and get your certificate of insurance in about 10 minutes. You can protect your business and start selling stuff on Amazon right away.
If you have questions, our licensed, U.S.-based insurance professionals are ready to help.
Matt Crawford leads NEXT's content team. He's a small business insurance specialist and has worked with business owners throughout his career as a community journalist and content marketer.
You can find him at one of his many favorite local restaurants in the San Francisco Bay Area when he's not at work.
