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Everything you need to know about Amazon insurance requirements

Everything you need to know about Amazon insurance requirements

By Matt Crawford
Feb 21, 2022
6 min read

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:

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.

Get Amazon seller insurance to protect your business

Why do Amazon sellers need insurance?

Amazon doesn’t want to assume responsibility for malfunctioning products or lawsuits filed by disgruntled customers. That’s why they require sellers with a Pro Merchant account and 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.

Here’s how.

Let’s say someone buys the face serum you sell and has a severe allergic reaction that sends them to the emergency room and leaves them with a stack of medical bills.

Or the battery of a remote-control car you offer explodes in someone’s living room and burns the carpet and sofa, which now need to be replaced.

If you're insured and customers sue you to pay their medical bills or replace their damaged property, the insurance company will help pay to defend you in a lawsuit and cover any awarded settlements. Or your coverage might help resolve the situation before you even go to court.

If you don’t have insurance, you’ll have to cover the costs yourself, which can be expensive and lead to a financial loss.

Even if you’re selling something that poses little to no risk, it’s better to be protected. 

Don’t forget someone can sue you even if you haven’t done anything wrong. And insurance will help pay to defend you — no matter how frivolous the lawsuit may be.

How NEXT can help you get the sellers insurance you need

At NEXT, we work directly in a partnership with Amazon to ensure our policies satisfy their insurance requirements. 

Getting the coverage you need for business is easy. 

Our application process is 100% online, which lets you review your policy options, purchase coverage and get your certificate of insurance in less than 10 minutes, so you can start selling your stuff right away.

If you have questions, our licensed, U.S.-based insurance professionals are ready to help.

Start an instant quote today.

Additional resources for Amazon sellers

Our goal is to help Amazon sellers thrive beyond just meeting your insurance requirements. Check out our latest blog posts for Amazon sellers:

Everything you need to know about Amazon insurance requirements

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About the author
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.
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