Do I need insurance to sell on Amazon?
If you are an Amazon seller with a Pro Merchant account and gross sales of $10,000 a month or more for three months in a row, Amazon requires you to have business insurance.
Why does Amazon have these insurance requirements? They want to limit their liability exposure if you sell something on their platform that causes an injury or property damage.
Even if you’re not required to have insurance, you may want to purchase it anyway to ensure you are 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 usually protect you from financial losses if you do business on other websites or at a brick-and-mortar location, too.
Amazon seller insurance requirements
Here’s what you need to know about purchasing an insurance policy that meets the Amazon seller insurance requirements for Pro Merchants.
You’ll need liability coverage
You need $1 million in liability coverage, per occurrence and in aggregate, to meet Amazon’s seller insurance requirements for Pro Merchants.
Your policy (or policies) must include coverage for:
- Products liability
- Products/complete operations
- Bodily injury
- Personal injury
- Broad form property damage
- Broad form contractual coverage
It’s worth noting that general liability policies typically include coverage for bodily injury, personal injury and property liability, but they don’t always provide product liability coverage. At NEXT, we include it with every general liability policy.
Add Amazon as an additional insured
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.
Provide proof of coverage
Amazon might send you a request for a certificate of insurance. 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 download your certificate as many times as you want, 24/7, at no extra charge. All you have to do is log into your account online or download our mobile app and press a few buttons on your phone.
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.
This will help you understand your expectations as a seller.