If you’re a third-party seller on Amazon, having the right business insurance can help protect you from financial losses if something goes wrong with the product you sell.
Amazon also requires liability coverage for some sellers.
Even if it’s not required, you might still want to purchase coverage. Without insurance, you are responsible for paying all costs — and they can add up quickly — if a product you sell causes an injury or property damage.
Let’s take a closer look at what you need to know about Amazon seller insurance, plus some real-life examples of how a policy from Next can help protect you as a third-party Amazon seller.
Amazon seller insurance requirements
Amazon requires $1 million in liability coverage, per occurrence and in aggregate, if you’re a seller with an Amazon Pro Merchant account and gross sales of $10,000 a month or more for three months in a row,
Your policy (or policies) must include coverage for:
- Products liability (also known as products/completed operations liability)
- Bodily Injury
- Property Damage
- Personal Injury
Examples of how Amazon sellers insurance protects your business
Next’s general liability insurance meets all Amazon Pro Merchant insurance requirements. Here’s how the different types of coverage work if something goes wrong.
Product liability coverage
Product liability coverage means you’re protected from financial losses (up to your policy limits) if someone accuses you of selling a product that’s defective and causes harm.
Product liability coverage from Next protects against claims from:
- Bodily injuries
- Property damage
Keep reading to dig into the details of each category:
Bodily injury
Bodily injury is just like it sounds. It covers you if your product or operations causes 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 kicks in.
Property damage
Property damage is also just like it sounds. It covers 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 kicks in.
Personal injury coverage
Although they sound alike, personal injury is different from bodily injury. It’s important for sellers to know it is also included in their general liability coverage from Next.
It provides financial protection if you are accused of slander, libel and 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 will help pay for your legal costs and any settlement that might be awarded.
Additional coverage options for Amazon sellers
General liability is the only type of coverage Amazon requires sellers to carry — and it covers lots of the risks you could face. But other kinds of insurance cover different risks. Depending on your business, you may benefit from having additional coverage.
Commercial property insurance
Commercial property insurance helps protect all the stuff you need to do business, including your supplies, inventory, equipment and commercial building if you own one.
It can also help you replace your income if you need to shut down temporarily because of a covered event.
Let’s say you’re a photographer and you sell your prints online. A pipe bursts in your studio, ruining your photography equipment, furniture and flooring. You have mold from the water damage that needs to be remediated before you can start using the space again.
Commercial property insurance will pay to replace your equipment, furniture and flooring. Plus, it could help you replace your income and cover everyday operating expenses, such as utilities until your business is up and running again.
Commercial auto
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 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.
Workers’ Compensation insurance
If you’re more than a one-person shop, most states require you to have workers’ comp coverage. It helps pay the medical bills and lost wages of employees who get sick or hurt on the job.
If one of your employees helps you fulfill an order, and they throw their back out while lifting heavy boxes, workers’ comp coverage kicks in to help with medical expenses and lost wages while they recover.
Workers’ comp can also cover you if you opt for business owner’s coverage.
How Next can help you get the Amazon seller insurance you need
We make it easy to get the coverage you need to protect your business and meet Amazon sellers insurance requirements.
Our online application process is fast and easy. You can review your policy options, buy coverage and share your proof of liability insurance in less than 10 minutes.
Our licensed, U.S.-based insurance professionals are available to help if you have questions.
